Without a well-established online presence, your brand may as well be invisible these days. As the efficiency of traditional media promotions is going down, the importance of having a successful marketing strategy increases.
However, planning and launching a marketing campaign is only the beginning of your journey. After you take this first step, you’ll have to set up a special kind of monitoring system to measure the success rate of your efforts. Analyzing this data will show if your investment is paying off, as well as highlight the areas that must be improved.
There are quite a few ways to calculate your marketing ROI. You’ll need to look into all of them and pick the one that meets your specific business needs.
How to Measure Marketing ROI
Choose the Right Metrics
The problem with many business owners, especially beginners, is that they choose to track what is easy, instead of what really matters. Of course, key performance indicators (KPIs) like clicks, likes, and visits are important to analyze. However, you need to know more about your customers’ behavior to get a fair assessment of your marketing campaign success.
The ‘deeper’ reports you should track include:
You need to get multi-channel revenue reports in order to compare which of them work best and decide your future investments based on this data. Please bear in mind that a variety of factors can contribute to the channel’s success. Therefore, it will require a deeper analysis if you want to make it more profitable in the future.
Understanding where your traffic comes from is vital for assessing the efficiency of your strategy. It would be best to invest more in the channel that shows the best results and rework your approach to those that are currently failing. However, you also need to consider which channels bring more conversions. If one of them is responsible for most of your traffic, but it doesn’t lead the visitors down the funnel, you should focus on others and make adjustments to fix the problem.
Every business needs a blog today, as the very presence of it increases traffic. Tracking blog leads over different periods of time will help you assess the customer response to your content. You need to know how exactly people are finding your blog content to understand which channels are most valuable for future content promotion. Observing the changes in blog lead generation over a period of time will allow you to see which topics are most successful. Study weekly reports to adjust your content strategy fast.
A steady growth of your customer database is a clear sign of your marketing strategy paying off. You need to track contacts based on specific characteristics (‘persona’) that you target in order to see whether your campaign draws in the right kind of people.
Leads based on offer.
This report will allow you to see what kind of offer/content generates more leads. Use various parameters for analysis so that you can understand which of your marketing tools perform best and why.
These aren’t the only relevant marketing reports, but they are the ones necessary for better resource allocation. Luckily, today you can easily generate them by using a variety of specialized solutions that track and analyze all kinds of metrics. Check out Marketo, Bitly, Pardot, and Google Analytics to see what these tools can do.
Analyze the Data in the Scope of Your Campaign Goals and Predict Future Developments
The work you conduct with collected metrics is called ‘descriptive analytics’ and it’s necessary for understanding your marketing performance NOW. However, to improve it more effectively, you also need to use ‘predictive analytics’. This entails using the big data to build models and assess their potential efficiency.
When you build these models, you need to put them in the scope of your campaign so that you can see the prospective results from different angles. This will increase the accuracy of your predictions.
Do Basic Calculations
Calculating your marketing ROI using the basic formula will give you some idea of how good your strategy is doing. However, you need to understand that this isn’t an accurate measurement and you need to look into a detailed analysis of metrics and channel performance to see what exactly works and fails.
The most basic marketing ROI formula goes like this:
(Return – Investment) / Investment
Multiply the result by 100 to see your ROI expressed as a percentage.
Despite its seeming simplicity, for the formula to provide accurate results you need to include a great number of variables in both Return and Investment.
Track ROI Over a Period of Time
You need to analyze your ROI both short and long-term to see the overall performance of your strategy. The data collected over short periods of time will help you make minor changes that should improve your marketing as a whole.
Analyzing the ROI over a long period of time will allow you to see whether your investment pays off in general. Use this data to decide your marketing budget for the next campaign, year, etc.
Calculate Brand Lift
Brand lift is one of the most important goals you must strive to achieve through marketing. The strength of your brand is directly tied to the level of customer loyalty, as well as your business’ visibility.
Compare the Data to Your Goals
To see how well your marketing is faring, you need to have some kind of ‘measuring stick’. In this case, this would be the conversion goals you set when planning your strategy.
If your results don’t live up to your goals, look deeper to find the weaknesses of your campaigns. This way, you’ll know what to work on in the future.
Keep Track of Your Marketing Progress at All Times
The secret of getting a good return on investment from your digital marketing strategy is to check your progress regularly. Analyze the data collected using different metrics on a weekly basis to adjust your methods. Look at the long-term picture to see which changes work out best.