Organizations execute marketing programs with a goal of realizing results by way of new customers and sales. With content marketing and social media clouding the modern marketing landscape, many business owners find measuring their marketing a confusing and sometimes impossible endeavor.
Many companies go on gut instinct and ad-hoc feedback from customers to determine what’s working and what’s not. For example, if the sales team reports that people are commenting about the recent email campaign your company sent or you notice a nice-size crowd stopping by your booth at a recent trade show, you presume that means those things are working. On the contrary, if your business recently launched an ad, but no one mentioned seeing it, you begin questioning your advertising investment.
Just because you’re not hearing or seeing feedback from your marketing efforts does not mean they’re not working.
If a customer originally was referred to your company but never mentioned the reference source, does that mean you never get referrals? Or if another client clicked on your email campaign, but reached out a week later via phone for a proposal, does that mean the email campaign didn’t work? And consequently, if you received a lot of RFP’s from online ads, but none of those RFP’s closed into new business, does that mean the online ad was still successful?
Unfortunately, this ad-hoc feedback is nearly impossible to tie back to sales in a quantifiable way.
Measurable Metrics That Ultimately Impact Revenue
In order to leverage your marketing efforts, you must measure their effectiveness and create quantifiable marketing analytics.
1. Lead Generation
Find out how well your lead generation efforts are working by tracking the number of new leads and marketing opportunities brought in across all of your online marketing, paid ads and referral programs.
For more accurate measurement of leads, call tracking and sophisticated online marketing tracking tools are necessary.
2. Most Effective Channels And Mediums
Find out which channels and mediums are most effective in attracting new client inquiries, including those most likely to convert. Be sure to look at channels like social, paid social, search, paid search, lead nurture programs, content marketing and events for a complete picture.
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3. Spending Efficiency
To understand how efficient your marketing investments are, take the average cost of lead generation versus your average spend on marketing efforts per lead. Measure the effectiveness of your investment month over month and year over year. By consistently aiming to outdo prior performance, you’ll continuously improve your marketing efforts.
Measuring Revenue, Not Just Leads
4. Return On Marketing Investment (ROMI) And Customer Lifetime Value (CLV)
These two metrics get to the heart of investment return and value gained by predicting how much revenue a customer will bring to your company over the course of the entire relationship. By knowing your CLV, you can better estimate the return on your marketing investment not just by month or by year, but by the entire lifecycle of the customer.
5. Marketing-Driven Revenue
In order to prove the value of marketing, you’ll need to show how much actual revenue your marketing is generating toward your business. To do this you can use revenue attribution models to track marketing-influenced revenue as a percentage of the company’s total revenue.
Additionally, narrowing your metrics down to the original lead source of each new customer allows you to not only measure your top lead generating tactics, but your top revenue generating tactics as well. In conducting this type of analysis, you may find that your top lead generation source may not be the same as your top revenue generation source.
For most companies, investing more dollars in top revenue generation sources is the key to improving year-over-year results.
