The impact of marketing isn’t always clear. That’s one of the main reasons business owners hesitate to invest in marketing. It’s also the reason why marketers must evaluate the success of their performance to justify investments and prove their contribution to the overall bottom line.
Easier said than done. Still, there are many ways to measure marketing success. And to find out what works best for your company, here are some tips for measuring marketing impact. Maybe even prove ROI.
Determine What Is ROI for Your Company
The first step is to determine the key performance indicators (KPIs) for your organization. KPIs measure how effective marketing efforts are at achieving their goals, which helps prove a positive (or negative) ROI. In marketing, this means tracking various metrics across various channels. The parameters you choose greatly depend on how you view success.
So, for example, if you want to grow your business using content marketing, you measure metrics that show how successful you are at gaining leads through content. It can include the number of blog posts published, average time on site, and click-through-rate from blog to landing page.
Key takeaway: Focus most of your attention on actionable metrics, like engagement or retention. Stay away from vanity metrics that don’t measure actual performance.
Conversion is the most significant metric used to determine marketing ROI. It measures the effect your efforts have on driving leads along the sales funnel and turning them into sales. Monitoring this metric also allows you to see how many customers are converted during the buyers’ journey.
Knowing how effective your marketing efforts are at creating sales allows you to distribute the budget better and allocate resources to channels with the highest performance. It also signals possible areas where improvement might be necessary.
Key takeaway: After measuring conversion, don’t dismiss underperforming channels. Use A/B testing to optimize and adapt them to meet the expectations of your target audience.
Calculate Customer Acquisition
Customer acquisition cost (CAC) is a key metric used to measure how much business needs to spend to earn new customers. This metric is extremely useful when you want to establish the marketing budget. Plus, it’s easy to calculate.
Add up the combined costs of marketing per month (the marketing budget,) and divide it with the total number of customers you acquired in that time. So, if you spend $2000 in one month, and receive 20 customers, the company’s CAC is $100.
Key takeaway: Calculate CAC regularly. It allows you to determine productivity and any changes to cost, which can impact ROI.
Start measuring your marketing efforts. Evaluate every segment of your process and determine its success. The contribution is there, all you need to do is find it. In doing so, you create a much clearer picture of your marketing performance and prove it has an impact on ROI.
If you want to ensure the growth of and success of your company contact a professional digital agency which specializes in creating strategies that have a proven impact on ROI.