Every modern-day marketer knows that at some point or another they’re going to need measure return on investment. The main issue being, many often dread calculating ROI because it can be hard to know where to start.
Sure, you can measure click-through-rate in emails, how many LinkedIn followers you have or the number of people that fill out a specific form on your website, but the common struggle most marketers share comes down to identifying which actions are actually proving their worth and how to measure the return on marketing investment (ROMI).
Especially during times like COVID-19 when many companies face financial downturn, marketing needs to tie their activities to real value and company revenue because:
Resources are limited.
You need internal buy-in.
Marketing spend needs to be conservative, yet impactful enough to achieve results.
Like many other aspects of a hybrid online/offline world, there’s a lot left to uncertainty. Not every marketing effort is easily measurable by the number, as in how much value a television commercial or local banner contribute to your overall brand awareness. And although measuring online marketing activities can offer far more data, the challenge lies in understanding how it correlates back to spend and revenue.
So how do you prove that your marketing investments are worthwhile? Here are some data-driven tips on how to start measuring your ROMI:
Categorize marketing channels
You might have heard the term, “What gets measured gets managed.” Breaking down marketing channels into smaller data sets will help you easily identify which ones are reigning in the most success, and which channels are lagging behind.
For example, your company may use online advertising across various channels. Stratify and label them.
Track the original source of your leads
Set up a logical way that makes sense to you and your team to track the original source of leads in your contact database. Whether that’s by defining a new contact property in your CRM or creating specific identifiers. You should be analyzing this data quarterly.
Knowing where your leads are coming from is essential to understanding your (potential) customer profiles and which marketing activities have been the most successful at attracting them to your business.
Which channels are bringing in the most MQL’s? Are they coming from offline sources such as referrals? Organic search? A recently hosted webinar?
Identify what your main lead sources are (social media, referrals, sales, events, etc.), and group them into 5-10 main categories. Again, subcategorize and create smaller data sets when possible.
For example, one of your main lead sources comes from social media and your company uses multiple platforms. Subcategorize based on platform type i.e., LinkedIn, Facebook, Twitter and so on.
You need to determine where your leads are giving you their most valued information. Are you getting a lot of contact information from a specific form or gated content on your website?
Track where you’re getting the highest conversions from, and where you’re gaining the most data on your leads. (You’ll be able to draw conclusions like which CTA’s are generating the most conversions, for example).
Keep in mind the quality vs. volume of the contact data you’re receiving. If you’re getting a higher volume of data from unqualified leads, it may be time to gate your content further, place a disqualification rule on your web forms or direct them to a nurture track more in line with their buyer journey.
Add a UTM code to your URLs to track performance of campaigns and content.
UTM’s add a small snippet of code to the end of a URL to measure where your site traffic comes from based on specific parameters.
Tools like Google URL Builder can help you build the UTM code and Google Analytics will create a customized report to analyze site traffic based on source, campaign, medium or a combination of the three.
Attribute cost & revenue
All marketing activities require spend. You can easily calculate the cost of an event. Let’s use a trade show as an example.
You invest €10.000 to host and advertise + €1.000 in travel expenses and the outcome is 50 new business leads - an average of €220 per lead.
Although online advertisement isn’t as tangible as an in-person event, it’s just as viable to measure.
For online advertising, you need content assets which require cost attribution. For example, you run an ad to promote your e-book on how to generate new leads. You spend €1.000 per month on online ads, and it generates 50 new email addresses - a total of €20 per contact.
Naturally, the cost per conversion is higher at first launch, but as your assets gain more conversions, that rate will decrease over time.
Set success KPIs
Define what success looks like for all marketing activities.
Maybe you want X number of leads to register for an upcoming workshop using a link in a newsletter, or you want X number of SQL’s to download a case study recently sent to them.
Evaluate your success KPIs every 3-6 months. Which KPIs were met? Which one’s weren’t?
Setting KPIs for emails, events and all other marketing efforts keeps your investments attributed and focused on a clear goal. The more activities you can support with data, the easier it becomes to compare KPIs and successes.
System integrations: Connect Marketing automation with your CRM
Connecting a marketing automation platform to your CRM is one of the best things you can do to increase productivity and scale your business, without increasing the amount of resources needed to do so.
Marketing automation enables you to increase the amount of leads you’re able to reach out to over time, acquiring more data in return on things like campaign metrics, lead conversion and customer behavior.
Measuring ROMI is necessary for all marketers, and yet, it’s challenging because there isn’t a linear path to getting there and not all marketing campaigns will have a clear tie to revenue. However, keeping as many metrics as possible data-driven and directly attributable to your marketing spend will help you maintain the right resources, prove the value of marketing over time and secure higher company revenue long-term.