"The good news is that technology has eased the process of tracking and measuring your marketing activity, both online and offline. This allows you to gain a more detailed picture than ever before of your marketing ROI."
Measuring the Return of Investment (ROI) of your various marketing campaigns can prove to be a complex and challenging task. Difficulties include not knowing exactly how many and which interactions converted each lead, as well as not knowing when or how to measure results and which channel(s) to attribute them to - particularly for long-term strategies such as trade shows and content marketing.
You may also need to take any in-house staff salaries into consideration, or decide whether to purely measure sales or consider the lifetime value of a customer. Then there’s the fact that buying teams can contain a dozen or more influencers, not to mention factors outside your control, such as economic trends or the business’ sales representatives, which can dramatically skew your results.
The good news is that technology has eased the process of tracking and measuring your marketing activity, both online and offline. This allows you to gain a more detailed picture than ever before of your marketing ROI. Here are our top three tips to get you on your way:
Choose Your Methodology
There are five main methodologies which can guide you in measuring and attributing ROI to your campaigns; the more rigorous the method, the more detailed the insights you get.
Single Attribution is the most common methodology, which assigns the entire value of the conversion to the first or last campaign that the customer interacted with. It’s fairly cheap and easy to implement, but it doesn’t account for the influence of other touch-points, so the insights you’ll gain will be fairly top line.
Single Attribution can also unfairly favour short-term campaigns. Single Attribution with Revenue Cycle Projections, on the other hand, accounts for the time it takes for long-term marketing campaigns to pay off, which is great for companies with considered-purchase products and longer revenue cycles. This approach uses historical conversion metrics to estimate what impact a long-term campaign will have.
However, Single Attribution with Revenue Cycle Projections still does not account for the influence of other marketing campaigns, and using past figures leaves marketers unable to identify any underlying changes.
Multi-Touch Attribution attempts to measure the contribution of each and every touch-point. By identifying all of the campaigns that the customer(s) interacted with, before completing a particular conversion, you can attribute a portion of the credit of the conversion to each campaign.
Not only is this useful for companies with long-revenue cycles and multiple touch-points, Multi-Touch Attribution allows marketers to start to examine lead generation and nurture the most profitable marketing channels. However, this method can also result in too much credit being given to channels and campaigns that in reality have very little impact. It’s easy to miss every single contributing channel.
Test Groups are a great way to measure the true impact of a particular marketing strategy. Almost anything can be measured using two well-formed control groups and comparing the results, although this method cannot measure the effectiveness of all programmes, and the costs can spiral out of control if you want to test everything using control groups.
Finally, Market Mix Modelling uses statistical techniques such as regression to show how sales volume outcomes depend on a multitude of marketing campaigns and other factors unrelated to marketing. It’s a very accurate method which measures all programmes and external factors – but it requires a lot of data and sophisticated analytical skills, which can be costly and time consuming.
Choose Your Analytics Tools
Once you decide on your favoured method, your next step is to set up your analytics tools so that you can start to track and measure the metrics most relevant to your business goals; these can include the number of enquiries or sales, unique or new visitors to your website, visitors from search/social or the level of engagement with content.
Many website and social media analytics tools are free, including Google Analytics, Google Search Console and Google AdWords Reporting, as well as insight tools which are available from Twitter and Facebook.
Tracking digital interactions yourself is easy, but don’t forget to track your interactions offline, too. For example, research from BIA Kelsey confirmed that around 65% percent of Fortune 500 companies still regard telephone calls as their top quality lead source.
Call tracking providers like Mediahawk allow marketers to measure the number of telephone calls their campaigns generate as well as how much revenue those calls contribute to the business. By properly attributing conversions that occur offline, you’ll be able to generate fully integrated reports and fine-tune your marketing strategy to focus on the sources which drive the highest quality leads.
Deciding on and implementing the right marketing ROI measurement method and analytics tools can be a daunting process; however, quality will always beat quantity, so measure only what you need to do in line with your business goals and focus on what will provide actionable insight to improve your strategy.
You’ll find that you’re more able to improve your marketing ROI with a small number of fine-tuned metrics and tools than an unfocused approach yielding inaccurate and inconclusive data cannot find. Keep it simple to start with and once you perfect each stage you can work your way up to more complex strategies that give you well-informed reports.
By identifying the most cost-and time-effective channels and campaigns through a mixture of the best measurement tactics, you’ll be able to optimise your marketing programme and deliver increased sales, profits and market share.
By Kayleigh Conway from Receptional Ltd