When your company is spending money on marketing activity: SEO, paid advertising, or brand partnership, you want to get a good return on this investment. But, more often than not, businesses spend too little time actually analyzing and scrutinizing the performance of their marketing campaigns and channels.
Once you’ve invested in an expensive promotional campaign, you'll want to know that the money is well spent. So, setting aside some time to analyze your results and establish your return on investment is not just a ‘nice to have – it’s an essential part of the marketing process.
Measuring success in your marketing Knowing your return on investment (ROI) is vital if you want to make sure your marketing truly delivers on its promise. It’s only by analyzing the performance of each marketing campaign or customer event that you can get a realistic idea of whether it was a success or a flop.
The key problem with measuring your marketing return is that good marketing goes way beyond the purely financial impact. But, as we’ll see, to gauge any specific impact on your profitability, you’re going to need to start with the financial basics.
Let’s look at key ways to analyze the impact of your marketing:
Financial return
One way to look at your ROI is sales income minus your investment (the cost of sales and marketing).
Use your accounting platform to get an idea of the income (return) generated from sales of the product/service you’re marketing. Then use this number to work out your marketing return with the following formula:
((Return - Investment) / Investment) x 100.
For example, if you made 8k from sales of your new app but spent 2k on marketing the app, this would work out as follows:
((8,000 - 2,000) / 2,000) = 300% ROI.
Engagement and conversion return
Knowing your financial ROI is vital, but it’s also important to measure the effectiveness of your marketing.
In the age of digital and online marketing, this has never been easier to do.
Using web analytics tools, like Google Analytics, you can measure areas such as engagement (people viewing or clicking through to your content) and conversion (people following your marketing calls-to-action). High engagement and conversion scores mean your digital marketing is being seen by the right people and delivers a return on your digital investment.
Lead generation return
If your marketing is doing its job, you should see an increase in lead generation and new inquiries.
Tracking and nurturing new leads and inquiries through your client relationship management (CRM) platform allows you to follow the progress of these leads. Once set up in the right way, you also see a direct correlation between your marketing and the conversion of leads into sales (and, by extension, into more revenue for the business).
Brand reputation return
Your brand is an integral part of your marketing as a business.
One desired outcome of your marketing should be to raise awareness of your brand in the marketplace and reinforce your brand reputation. Measuring the changes in brand awareness pre and post-marketing helps you see where your investment is impacting.
So, why tracking marketing results matter to your financial story?
It tells you the story behind revenue growth or decline based on data, no guessing.
It tells you which channels deliver the best return, which target audiences are responding well to your campaigns, and which content is knocking it out of the park.
Armed with this knowledge, you can refine, rethink and improve your marketing – ensuring that you improve your overall ROI over time.
More importantly, tracking your marketing results helps you in creating the story of future revenue.
Ready to map out your marketing results and forecast the future? Let's connect and figure out how we can help you.