As a marketing agency, we often get asked how we provide ROI to our clients. Proving ROI to clients can be challenging as every campaign is different, and every client has different goals. So, how do you measure your marketing ROI?
Define your marketing campaign. What does your marketing ROI look like?
Understanding the objectives of your marketing campaign will help you to determine what you can measure to determine the success of the campaign. With this in mind, it’s not just enough to use marketing tools such as email marketing, content marketing, social media, and digital advertising, they need to have an end goal that supports the effectiveness of your marketing campaign.
Are you…
- looking to raise the brand awareness of your company?
- wanting to retain existing customers?
- converting potential leads into new business opportunities?
To measure the effectiveness of the campaign, you need measurable goals against each of your objectives.
So, if you’re looking the raise the brand awareness of your company, what does this look like? Do you want your website traffic to increase by a certain value? Do you want more engagement on your social media activity?
If retention of existing customers is one of your objectives, how will you achieve this, and through what channels? What do you want your existing customers to do and how do you want them to respond or engage with your campaigns?
And whether converting potential leads into new business opportunities is your objective, do you have a set monthly/quarterly/annual target of conversions you need to achieve to meet sales targets?
Once you’ve determined your goals and objectives, it’s time to determine the strategy and the marketing channels you need to achieve these.
Define your marketing channels and the marketing ROI you expect to achieve
No matter your objectives, you’ll more than likely need more than one marketing channel to measure effectiveness for a range of audiences.
Paid search
Driving targeted traffic to your landing page through digital advertisements (Google Ads, paid social media ads such as Facebook/Instagram/LinkedIn). Therefore, set a budget for your campaign, and measure this against the number of conversions generated. The effectiveness comes from how many customers come from the conversions. It’s not necessarily the cost of leads and conversions, it’s about how much it costs to get a customer signed up.
Social Media
If your objective is brand awareness, there are many tools that help measure engagement across the various social platforms. For example, for lead generation, you can easily determine how many enquiries resulted from social media. Now you need to determine how many leads were converted and how many conversions became customers.
Content Marketing
If your content is well structured, engaging, and interesting, then your call-to-action (CTA) should lead to an easy conversion. If not, why? Determine what content your audience is engaging with and then make the appropriate changes.
Email Marketing
This is a digital strategy that can be split up by market segment, customer segment, or buyer persona. Therefore, you can determine an email campaign’s success by comparing click-through rates (CTR), bounce rates, and conversions. Focus on how well your call-to-action performs within your email campaign.
Existing customers
They’re already in and engaged with your business, so your focus is on retention. Determine the frequency you need to be engaging with existing customers and how you reach them. For example, consider email marketing, sharing your latest news, insights, and offers that are targeted for your audience. Measure the effectiveness through email campaign open rates, click rates, and unsubscribes. If your unsubscribe level is high – determine why. Is it the frequency or the type of content that is turning them away?
Measuring the effectiveness – setting KPIs
Tracking your expenditure by marketing channel is critical to determining the cost of a marketing campaign. That’s where your key performance indicators (KPIs) come into play. For instance, you know what an acceptable click-through-rate (CTR) is on each of your marketing channels based on how those channels performed for your company in the past.
Setting measurable KPIs allows you to define the cost of traffic generated, cost of conversion, and cost of customer acquisition for each of the marketing channels. Therefore, you should break down your KPI reporting by week, month, or quarter determined by original objectives. Within each report, you are measuring the data, cross-referencing it against past performance to ensure your marketing campaign is on track.
Summary
As we said at the beginning, every client and every campaign is different, so your marketing ROI is bespoke to your business objectives.
If you’d like to speak to us on ways in which we measure your marketing ROI, get in touch.