Marketing is one of those areas of business where it’s hard to know whether your money is being well spent. But tracking your marketing return on investment (ROI) is extremely important in terms of setting budgets, allocating resources, and evaluating the effectiveness of your marketing partners.
That being said, if you want to better understand the bottom line impact of your marketing efforts then you need to have the right tools, systems, and strategies in place to measure the results of your campaigns. It’s becoming imperative for small businesses in today’s digital landscape.
At the end of the day, the more you’re able to track your marketing return on investment, the better equipped you’ll be to improve in the future and eliminate activities that aren’t that effective. Here are some of the most simple and effective ways to track your marketing ROI and why each one is important.
More activity means greater awareness
One of the best ways to measure your marketing ROI is by the amount of digital activity that occurs over a period of time. You’ll want to identify benchmarks for your website and search traffic, then measure the increase of each both following your marketing campaign and while it’s in progress. Effective marketing campaigns will normally increase your organic search referrals and direct traffic. Two things you want to monitor closely are Reach and Frequency, which are two of the cornerstone digital marketing metrics. Reach means the number of unique individuals your message is reaching, and frequency means the average number of exposures to your message each person has over a period of time.
Determine if people are taking action
Any solid integrated marketing plan includes a focused, effective call-to-action (CTA) that you want people to take. This could be anything from filling out a form to scheduling a demo with a sales rep. This could be a landing page, Contact Us form or “Sign Up” button. While clicks and pageviews are great, what’s really important is that a significant number of people are responding to your call-to-action. Whatever tools or technologies you choose, it’s crucial that you track trends in response to your CTA and which marketing activities are contributing to various responses.
Track your website visitors
While generating a huge amount of web traffic from your marketing efforts is great, you need to dig a little deeper into who those visitors are and what they are actually doing. This means tracking not just overall traffic and impressions, but unique visitors. You want to know if any increase in direct or referral traffic is directly related to your CTA. You might also want to consider purchasing multiple “Vanity URLs” to track traffic and keep separate from your main website. You should at the very least leverage tools like Google Analytics that will give you a breakdown of visitors, where they are from, what device they are using and what content they engaged with.
Make sure to capture data
When visitors come to your website, you want to capture as much of their data as possible. This is where having people fill out forms or subscribe to a newsletter, for example, are important. But once the user has handed over their information, you want to apply an even deeper analysis to that data. You’ll want to track things like the number of leads received, how many people who land on the form that actually fill it out (conversion rate) and the amount of conversions of these leads to actual customers.
Measure actual foot traffic
If your marketing is effective, you’ll generate foot traffic to your physical location as well as digital traffic. Although this might seem obvious, you’d be surprised by how many small businesses fail to include foot traffic when measuring marketing ROI. If your in-store foot traffic peaks during your ad campaign, that likely indicates your branding and call-to-action have been a success.
Look at your sales numbers
The goal of any marketing activity is to positively impact your bottom line on some level. Aside from the ways you’re tracking online activities, you should also be keeping close tabs on your sales figures. Key sales metrics differ depending on the nature of your business, and could be anything from gross sales to net profits to cash flow. Whatever it is, you want to make sure those numbers are increasing throughout the duration of your campaign. But don’t just take a look at the bottom line, you want to analyze the path to purchase people are taking. Maybe they saw a post on social media, clicked through to your website and made a purchase? While it’s not always easy to decipher the purchase path of every single customer, tracking customers this way will help you see the full picture about how your marketing efforts have impacted your bottom line (which is what really matters in the long run).
Finally, you’ll want to decide on an attribution model, where you’ll determine how you want to tie your marketing activities into final sales. Was the purchase due to a social media campaign? Maybe it was the newsletter they signed up for? Whatever it is, have your sales funnel and path to purchase mapped out so you can come up with a system for measuring your marketing ROI that will work best for you over the long haul.