5 Things That Everyone Should Be Doing To Measure Marketing ROI
Why is calculating your marketing Return on Investment (ROI) important?
First and foremost, it’s because marketing should be viewed as an investment, and not as an expense.
And like any smart investment, it need to be measured and monitored to make sure that it’s working for you, and not the other way around. Here’s how you can do so:
1. Ask every one of your prospective clients how they found you.
This sounds extremely obvious, but ask yourself if you have been disciplined in doing so. Few truly take the time to (1) ask (2) record this information (3) generate a simple report to note primary prospect entry points. By knowing the primary entry points, you can funnel more resources there and get a better conversion rate over time.
Whenever someone interacts with your firm – whether it is in-person, over the phone, or online – ask them how they found you. If someone views your profile on LinkedIn, ask them what brought them to your profile. It could have been an article you wrote that was re-published on a forum. Find that source, and it’ll be something you want to explore and leverage.
2. Email/ Video Tracking
You might say, “this seems like such a ‘Big Brother’ thing to do”. The truth is: you can’t fight it. Tracking analytics is already becoming mainstream. Simply sending out a fancy newsletter with all the best information leaves you with no “next-step”. Sure, some people might contact you directly, but what about those who just needed a quick follow-up to be converted?
The benefits of these analytics are threefold:
- It will tell you whether your email/ video marketing efforts are being noticed to the effect that you’d want them to be. If they are, good. If they aren’t, go back to the drawing board and find out what’s not working.
- It reduces the need for cold-calling. By knowing who’s interested (opened and clicked on hyperlinks in the email), you eliminate the need to go through the full list. You will be talking with people who are worth talking to.
- You can gauge the periods of best response for your specific audience. Weekends? Tuesday mornings before 8am?
There is a plethora of email/ video tracking online software that help you generate analytics. Some of them are good, some of them are bad. Some are overpriced, and others are great but few are using them. Ask me what you should be using.
Email/ Video Tracking has to be embraced now. You just can’t fight it. After years of resisting, Winston Smith himself discovered that he loved Big Brother all along.
3. Use unique URLs
Let’s just say that you’ve put out an advertisement on TV, in the newspaper, and on the radio. A few years ago, people would be picking up phones and calling in. In this digital age, most people’s first point of research about your product comes from visiting your website.
So what? This screams MEASURABILITY to the opportunist. For each advertisement you put out (change the mediums to whatever you want), create a unique URL for them, all of which point to your homepage. In your newspaper advertisement, the copy says “Visit us at www.my.fund123.com” but in a webinar that you provided, you say “Visit us at www.your.fund123.com”. Both point to your main homepage, but you’ll know whether the newspaper or the webinar was more effective.
Talk to your IT guy about it, he/she will have it set up in 10 minutes.
4. Leverage CRM platforms
CRM (Customer Relationship Management) platforms help businesses more efficiently track their relationships with prospective and existing customers. Tracking your prospective customer relationships is elemental to understanding marketing ROI – filter where both leads and duds are coming from, analyze your opportunity funnel, and record activity over a sustained period of time.
Just like email/ video tracking, there is an abundance of CRM platforms out there. Everyone has their favorites and so do we.
5. Doing The MATH
The above are just 4 of many ways you can measure your marketing ROI among many more (i.e. A/B testing, registered mail, etc.). But you’re not going to be measuring anything if you aren’t calculating anything.
Let’s use Google Analytics and your website as an example. Simply go to Audience → Overview → Sessions.
a. That’s your site traffic per month. b. Find out how much you are spending on your website each month, and don’t forget the initial investment you took out to build it. c. Find out your number of sales. d. Find out your total $ of sales.
From that you can easily calculate your conversion rate, $ value per site visitor, average sale, and your current website ROI.
Not too difficult, right? If you’re still not convinced that you should be measuring your marketing ROI, consider this:
Measuring your ROI will help you justify marketing investments. In tough times, the first thing in the budget to go is usually marketing – a dangerous move since marketing is an investment to produce revenue.
By consistently measuring your ROI, you can help holders of the purse-strings understand that marketing is not just a fluffy expense that can be cut when times get tough, and that it could well be what gets your company out of the hole you’re in.
By Alan Chu