It’s impossible to accurately track marketing ROI without capturing results and doing analytic reporting.
When you start running a campaign that appeals to your target audience, you might hear anecdotes from your sales team that this or that promotion was successful. But, how do you really know your marketing is working if you aren’t measuring results?
Without tracking tools, successes are difficult to prove definitively. Your so-called success might just be a blip in the seasonal sales cycle or something else not on your radar or outside your control.
With so much data at our fingertips, learning to track marketing ROI (e.g., the success of your campaigns) with accurate data is smart (and can make your work more efficient, too).
Read on for five tips for measuring marketing ROI in tangible ways to save you money and see results.
Define what success looks like
With a bit of homework before your campaign is set to start, you can start crunching the numbers to make strategic marketing decisions and define what success will look like. Campaign goals can vary from brand awareness to customer education to driving more leads and sales. Example campaign goals might include:
- Increase sales for specific product lines
- Generate new leads into the sales pipeline
- Increase the number of new users requesting free trials
- Grow subscriber list for email marketing
- Increase the total number of Instagram followers
Defining success in the early stages of marketing planning to help you reach your goals. For example, you may want to track marketing ROI from new leads requesting a consultation with your sales team. How you target them, what the landing page looks like, what information you need on the form—all of this is impacted by the campaign’s original goal.
Pro-tip: Not all ROI is directly tied to dollars coming in from campaign work, so determine what success metrics are and document your baselines.
Use a marketing tracking software
Having data at your fingertips that you can review is a great way to better understand which pieces really resonate with your leads.
A tool that can track marketing ROI will give you more opportunities to see other impacts of digital campaigns. With more comprehensive data analysis, you can identify ways to complement or enhance traditional marketing. Some ways you might leverage these insights include by:
- Utilizing friendly URLs for print materials that point to optimized landing pages
- Creating custom landing pages for commercials or billboards
- Including call tracking tools for a phone number in radio ads
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CLOSING THE LOOP
What is “closing the loop” in marketing?
Once marketing has generated a new lead and the sales team steps in, there’s often a communication breakdown back to the original source in marketing.
Closing the loop is the process used to track which new leads from marketing campaigns actually “close” and become customers.
Once your campaign launches and you start to see new leads coming in, how will you track leads through the sales funnel to know the close rate? Unfortunately, a single method does not exist across all industries and campaign targets. Automation is the best option for closing the loop when it’s possible.
To best track marketing ROI, you’ll need to consider how you can close the loop:
- What are the limitations of your sales software?
- Can you pull reports and filtered lists of new leads versus customers?
- Is the campaign obvious, such as a paid ad to promote a specific product, or will you use tracking URLs or other parameters to separate the data for campaign reporting?
- Can your sales software or CRM talk directly to your marketing tracking software, or will there be a manual process to update closed leads?
- What is realistic for new processes to ask of your sales team, schedulers, or order processors?
- Are there industry rules and regulations that will impact your ability to track marketing ROI, such as HIPAA?
Track direct and indirect data points
CUSTOMER LIFETIME VALUE
What is customer lifetime value?
Customer lifetime value—sometimes abbreviated as CLV or CLTV—is the total worth a single account has to your company over the entire time that customer does business with you.
Marketers and sales professionals use this information when creating strategies to attract leads and retain current high-value customers while preserving profit margins.
How do you calculate customer lifetime value?
Customer lifetime value is a helpful metric for tracking marketing ROI because it reveals which customers spend the most and which will stay loyal over the longest period. You can use this simple formula to determine customer lifetime value:
Customer Lifetime Value = (Customer Value * Avg. Customer Lifespan)
where Customer Value = Avg. Purchase Value x Avg. Number of Purchases
This tip ties back to the goal-setting in the previous section. No matter what types of goals you define and track marketing ROI for campaigns, you may also find value in analyzing related data. These can be split into two categories: direct and indirect data points.
Direct attribution will be a linear story that draws a straight line from a marketing tactic to the desired outcome. An example would be when a user sees a paid ad for one of your products, clicks the ad, and then makes a purchase. You can directly attribute that purchase to the paid ad when calculating ROI.
For indirect data, attribution is a little murkier. In this bucket, we have things like influenced contacts. An influenced contact could be a lead who learns about your company from an organic search but doesn’t click on your website the first time. Then later, they recall your company name when they see it on social media, reach out to learn more about your services, and then contact your sales team.
In the indirect example, the eventual contact with your sales team may not have happened if it weren’t for that original organic search. We can get a more powerful story about what types of content and marketing channels drive the best leads and have good ROI when indirect data is analyzed.
Designate an owner of the ROI tracking process
Last but not least, one of the best ways to see value as you track marketing ROI is to designate a project owner on your team. The process for collecting the information, closing the loop, or monitoring the details could range from simple to complex. Just be sure that what is needed and how often you’ll be checking is documented and clear, so you can utilize the information to improve your marketing.
When you track marketing ROI, you’ll start to make smarter, more strategic decisions with your marketing. Commit to using these methods to track the success of your campaigns and develop a better understanding of how marketing directly impacts your business success.