Data-driven marketing is shown to increase ROI by as much as 20%; of course, to understand data marketing in a way that's effective means being able to track ROI in direct relation to that data. We understand just how difficult ROI tracking can be. That's why we've written an article to teach you how to track ROI for your small business. To get it done right, you need to develop a process for data-driven ROI tracking, because without hard data, you can't properly attribute the causes behind either good or bad impacts on your revenue. Below are the four basic steps to get you started.
Step 1: Determine What Matters
You may realize that you need to determine the goals of a campaign and what you'll need to track, but you may not realize that this needs to be done before everything else. It's easy to get caught up in the creative, with what seems like the hard part of making marketing that works, but frankly, the math needs to come first. It also needs to be done for each and every marketing campaign and tactic, no matter how large or small.
First, define your goals, and be sure that they're SMART (i.e., smart, measurable, achievable, realistic, and time-constrained), and then use these goals to define your metrics. For example, your latest campaign is to promote a new product. You want to track not only whether or not your sales go up, but whether or not the sales of that product in particular go up. You also want to track whether or not particular ads work, not only in terms of getting audience attention, but whether or not the ads themselves play a role in the path to purchase (especially if they are the immediate touchpoint before purchase.)
What metrics do you need to determine these things? Website traffic and its source, display ad views and click-throughs, and video ad views and click-throughs are just some of the examples for what to track with digital. For traditional marketing, you ought to think about reach and impressions, call tracking, or individualized coupon tracking codes via direct mail. Once you're sure you're collecting the right data, you need to ensure that you're collecting it in a way that's aligned to the 4Cs: continuous, consistent, comprehensive, comparable.
Step 2: Have an Internal Method of Tracking
If you do nothing else, you need to at least maintain some simple data management for internal purposes. Track every campaign, every channel used in the campaign, and your overall marketing strategy for the year in spreadsheets to make note of qualified responses (or lack thereof). At the very least, you'll be able to note basic success and failure in a way you can compare to your bottom line to see if the strategy is having a positive impact on revenue. You'll need to regularly (i.e., daily, weekly and monthly), albeit manually, record comprehensive information to do this.
Step 3: Use the Right Tools
However, there are tools that can help you. You do need a way to internally collate the data from these tools to generate meaningful and actionable information for your marketing team, but the tools are a key way of streamlining data-driven ROI tracking. These tools will vary based on your industry and the platforms that you use for marketing, not to mention what level of data collation you're looking at.
When looking at the day to day collection level data, most platforms you use to market on a given channel offer tracking services. Consider Twitter Analytics or Facebook Insights, for example, which can track potentially important metrics such as shares, comments, and click-throughs. Facebook also allows you to customize the way you advertise with them, and Yelp offers the ability to create and track deals and can help you run various types of check-in campaigns, complete with tracked statistics. There's also slightly broader tools that gather the same level of information, such as Google Analytics.
Of course, these are all touching on digital, but that doesn't mean there aren't tools to track traditional forms of marketing. In some cases, even Google Analytics can help. However, more often you'll want to track along the terms of marketing dollar efficiency. This is what we tend to emphasize at Zimmer Radio & Marketing Group, along with other alternative metrics such as increased foot traffic, new patients/leads, and number of sales for a particular product or service (e.g., roofing from a home contractor that handles all exterior types of work).
When it comes time to integrate these metrics to a bigger picture for the campaign as a whole or for your over all year, covering multiple campaigns, there are tools to manage, track, and develop reports out of significantly larger amounts of data. Consider software like DataHero, which bills itself on enabling marketers to "chart any of their data from anywhere, any time," which then allows you to view and compare the relationships between various services.
Step 4: Analyze and Adjust
Just having the data isn't enough — you need to use it to paint a complete picture of your performance. The entire purpose of data-driven ROI tracking is giving yourself the ability to adapt when something isn't working. It can help you improve anything from audience targeting and user experience to ad design and remarketing. For it to work, you need to really analyze and understand not only what didn't work, but the factors that went into why it didn't work. At that point you can redeploy and, if it's right for your campaign, scale up your efforts.
Now that you've got the basics for how to track ROI for your small business, you can put that data-driven ROI tracking into the bigger picture. At Zimmer Radio & Marketing Group, we believe that this kind of ROI tracking is but one step in your overall marketing strategy, and what we refer to as the Marketing Bridge. After all, all the advertising tracking with the best tools in the business won't do much for your business if your Marketing Bridge is broken or underdeveloped. If you're not sure about the status of your business' Marketing Bridge, be sure to download our free document about the Marketing Bridge and the path to closing a sale and confer with your Zimmer Radio & Marketing Group partner to optimize this vital piece of your ROI puzzle.