Marketing is important. Everyone knows that. Knowing you need to get the marketing ball rolling is one thing. Setting the marketing ball in motion is sometimes a different story.
Knowing the exact return on your investment for each marketing campaign you run is a crucial aspect of running a successful business. You need to know that your efforts generate the desired results, which isn’t always easy to determine simply by looking at your profit margins.
Using Analytics to Prove Your Marketing Strategy ROI
Having a marketing ROI allows you to make adjustments towards achieving your goals.
Coming up with a marketing strategy that looks good usually isn’t difficult but being able to prove if that marketing strategy is earning a positive return on investment (ROI) is an issue many business people who are just like you struggle with.
Most marketing plans have several different elements which can make knowing the ROI difficult, especially if it takes a little while for the results to start rolling in or if there is overlap with another marketing strategy your business implemented earlier.
Why Knowing your Marketing Efforts ROI is Important
Marketing costs money and time, commodities all businesses consider important. No one can continue to invest time or money in a marketing strategy that fails to generate a satisfactory ROI.
Taking the time to determine the short and longer ROI of each of your marketing campaigns not only makes bookkeeping easier but also gives you hard numbers that you can use to determine which marketing methods you should continue utilising in the future and which you should replace.
Businesses that excel at determining their marketing ROI will further break down the data to help them determine which platforms work the best with each marketing campaign, enabling them to further streamline their marketing strategies, resulting in lower marketing expenses and higher profits.
Setting Marketing Goals
A startling number of businesses never get a satisfactory ROI on their marketing efforts because they failed to set clear-cut, definable goals when they were preparing to launch a marketing campaign. Good marketers know that different marketing campaigns have different goals. For example, one marketing campaign could be geared not to generating sales, but to improving overall brand awareness and attracting the interest of the business’s target market.
Another marketing campaign could be geared towards gaining new customers, while another could focus solely on selling one specific product. Knowing the goal of each marketing campaign allows you to use marketing analytics to accurately determine if the marketing campaign worked in the way it was intended. It also helps you see if the marketing campaign generated unexpected results.
Already stressing about the cost of how you’re going to attract and convert customers? Take a deep breath and relax. There are some low-cost, high-return options to get you started, including:
- Creating a high-quality landing page that provides visitors with high-value content
- Blogging not only helps you connect with your target market but also creates exactly the type of content needed to boost your search engine ranking
- Engaging on social media and really interacting with the members of your target market
- Email marketing is a low-cost, high-return form of promoting new products, events, etc.
If you’re struggling to find out the ROI of your marketing campaigns, you’re not alone. Approximately 40% of all businesses experience the same difficulty. This is especially true when you’re using inbound marketing methods to both build brand awareness and drive consumers into your sales funnel.
The good news is that it is possible to learn how to use analytics to prove the investment value of your marketing efforts.
How to Calculate the ROI of Your Marketing
Calculating the ROI of your marketing isn’t difficult. You simply need to remember this simple formula: Sales Growth – Marketing Cost / Marketing Cost = Marketing ROI.
You’ll want to use this marketing formula for every single aspect of your sales efforts. Each time you launch a new campaign, each time you explore a new sales channel, each time you target a new demographic, and whenever you create new marketing material.
Why Knowing your Marketing Efforts ROI is Important
Marketing costs money and time, commodities all businesses consider important. No one can continue to invest time or money in a marketing strategy that fails to generate a satisfactory ROI. Taking the time to determine the short and longer ROI of each of your marketing campaigns not only makes bookkeeping easier but also gives you hard numbers that you can use to determine which marketing methods you should continue utilising in the future and which you should replace.
Businesses that excel at determining their marketing ROI will further break down the data to help them determine which platforms work the best with each marketing campaign, enabling them to further streamline their marketing strategies, resulting in lower marketing expenses and higher profits.
Challenges Connected to Proving your Marketing ROI
Collecting the data needed to prove your marketing ROI isn’t always easy. Not only do you have to figure out how to extract accurate data from your marketing efforts, but you also have to know which aspects of that data are pertinent to your business. Last of all, you need to know how to measure the data so you can accurately calculate both the long and short-term ROI of your marketing efforts.
There are a few challenges you have to overcome first.
Make Sure you Consider all of your Marketing Costs
There is a great deal more to proving the ROI of your marketing efforts than looking at the immediate cost of the marketing material and comparing it to your sales figures. Before you can even begin calculating the ROI you have to sit down and determine the actual cost of the marketing campaign. The cost of your marketing efforts includes:
- Software used
- Price of content creation
- How much time was dedicated specifically to marketing efforts
- Cost of maintaining and updating website/landing page/funnel
- Cost of the freebie you provide your leads
Failing to determine all of the costs connected to each inbound marketing campaign makes it impossible to determine your true marketing ROI, a failure that can cost your business thousands of dollars in lost revenue.
Accurate Inbound Marketing Reporting
Collecting accurate data regarding inbound marketing efforts is a major problem for many businesses. A small mistake in the reports or missing a piece of information can cause results that suggest a marketing campaign is over or underperforming, both of which can cost your business a great deal in sales and lost customers. You can’t determine the marketing ROI if you don’t have accurate data.
The good news is that there are some things you can do that increase the odds of you dealing with accurate reporting, including analytic software programs that not only accurately collect the information needed, they’ll also compile it into neat, easy to understand, reports that you can consult whenever necessary.
The information the analytic reports have to compile includes:
- Number of leads generated
- The number of consumers reached
- How many of the leads ultimately became paying customers
- The short and long-term impact of a specific piece of marketing material
- Number of hits your landing page received
- Off-site marketing data
What to do After Proving the ROI of Marketing?
The work doesn’t stop after you’ve proved your marketing ROI. One of the main purposes of knowing which marketing avenues are generating the best return on your investment is using the information to streamline your marketing efforts. Use the information to cut back on the aspects of your marketing that are failing to generate the desired results and focus more of your marketing resources on the campaigns and channels that perform well. Take the money you would have spent on a badly performing promotional campaign and invest it in a marketing strategy you haven’t tried before. Who knows, the brand new approach might generate the best results you’ve ever experienced!
Examples of new forms of marketing you may decide to experiment with include:
- Creating a new digital sales funnel
- Testing out a new social media platform
- Taking a different approach to your digital content
- Creating a new product or service
- Video Marketing
- Pay-per-Click advertising
- Guest blogging
- Etc.
You owe it to yourself and your business to take advantage of every possible digital marketing resource, including contacting us about our digital marketing program. We will take a look at your current digital marketing platform and identify the aspects that aren’t generating the high-level ROI you require from your marketing efforts.
Once we’ve located the problem areas, we explore how to build a stronger, highly successful digital marketing program that not only helps you promote your products/service, identify members of your target market, and boost your brand but also engages with current and new clients in such a way that they become loyal customers who can’t say enough good things about your business.
The sooner you contact us, the sooner you’ll benefit from our digital marketing expertise.
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