Something that anyone who knows me will know is that I will quite happily bang on about measuring how effective your marketing is until the cows come home. It’s my job to.
I meet with business owners every day who have built a good business and have generated the work to support it, but they don’t have the first clue about where the new work comes from and they certainly don’t track the effectiveness of their marketing against anything.
It’s all well and good to use a scattergun approach to your marketing and then bring in some work from it, but how do you know which marketing channels are working effectively for you?
If someone was to ask you how many sales leads you generate from your website each month, could you tell them?
The chances are that the answer is no.
Luckily for you, this post will save your life and turn you into an overnight millionaire, and it’s free (disclaimer: only one of those statements was technically true).
How to measure how your marketing is performing
The first step is to understand how you’re actually marketing yourself and not just in terms of where you’re spending money. Your time is generally your most valuable asset, so make sure you’re considering that too.
For a lot of business owners, their marketing will be made up of a mix of the following:
- Online — including initial investment in their website, search engine marketing (via SEO or Google Adwords), social media and cold email outreach
- Offline — including newspaper advertising, radio ads, leaflet distribution, telesales etc.
Once you’ve worked that out, a spreadsheet will be your best friend so that you can keep track of expenditure for each channel. If you don’t physically spend cash on a marketing activity (for example if you deliver leaflets yourself), then work out expenditure by multiplying the number of hours spent on it by your companies hourly rate.
Understanding your goals
When you make the decision to advertise or market yourself more aggressively, you should have a goal in mind.
A lot of our clients are in the B2B services space and so their primary goal is to generate new leads for their sales staff to speak to.
If you’re an ecommerce or product based business however, the likelihood is that your goal will be purely about revenue.
You will also have secondary goals such as newsletter signups, social media likes etc., but for the purposes of simplicity let’s stick to primary goals for now.
Now that you have your goal in mind, you can begin tracking it. Because the majority of what we do for clients is lead generation, we’re going to focus on that side of things.
The starting point for most companies is just tracking raw enquiries so that they can understand how customers are getting in touch with them.
For most of you, an enquiry will come by telephone or through a form on your website, so those are two channels that you should be tracking.
We provide call tracking and form tracking on all of our digital marketing campaigns for the simple reason that it gives us a measure of success that both sides can understand easily.
If you can automate this process then that’s all the better, Google Analytics does a great job of this so that you can see which marketing channels are driving goal completions.
Set up a new column in your spreadsheet for ‘Goal Completions’.
Measuring your return on investment
Now, this can be a tricky one and tends to be very subjective. For example, you may be in an industry with zero competition where every enquiry will lead to a sale (or near enough) and, conversely, you could be in a fiercely competitive industry where customers will get numerous quotes, lowering the percentage of sales from raw enquiries.
Ideally, you should have some idea of how many leads it takes to get a sale for your company — this will obviously be an average over time.
Once you know this, you can plot a theoretical number of sales that should be generated from the number of leads generated.
You get extra points if you can work out your average order value here, put that in a separate column and then have yet another column to multiply the number of sales by your average order value — this should give you some idea of how much revenue each element of your marketing is generating.
Although Return on Investment sounds nice as a percentage, we prefer to just deal in actual profit (revenue created – marketing spend).
Your freebie for being proactive
I genuinely hope this article has helped you add some clarity to your marketing and hopefully it gives you some insight into how we operate as a marketing agency for our clients.
To thank you for reading and also to hopefully help you out a bit more, we’ve put together a template spreadsheet so that you can work out how successful your marketing is currently.
It’s loaded with formulas to work everything out for you, all you have to do is put in the amount you’ve spent on each marketing channel, how many leads it’s generated, your estimated close rate and average order value and then it’ll work out a rough idea of how much revenue has been generated and your profit on the investment.
Oh, and it’s free!
Sign up below and we’ll send it over to you: