Measuring the return on investment (ROI) you’re getting from your online marketing activity is important right? – no, it’s vital!
Look at it this way, how important is it to be able to justify your very existence? And to ensure your budgets aren’t going to be the first thing that’s cut – instead making them first in line for an increase (doesn’t get much more important than that!).
We’re living in a world where results and hitting the numbers really matters. Being able to effectively measure ROI and to tie your online marketing activity directly to the sales it has generated really is the Holy Grail. Where it can become a little tricky is knowing just how you go about doing that.
Unlike a sales rep, who could for example say what percentage or number of leads they’ve landed this month, so know exactly what revenue they’ve generated for the company, when it comes to marketingit can be a little less black and white. In fact the question of how to accurately measure the ROI of marketing and PR campaigns is a hot topic, and is something that the industry has been trying to agree on for decades.
For example, few (if any) new B2B prospects will see an ad, blog post or other piece of online marketing and give you a call all warm and fuzzy and ready to buy. It just doesn’t happen. Much more likely is that they will come across you after seeing an interesting blog post shared on social media. They may then check out your website and see you have lots more interesting content, so subscribe to your blog. Then later on (perhaps months down the line) they may decide to come along to one of the free events you’re holding, where they get talking to one of the team. And finally they may get around to buying almost 12 months after they saw that first blog.
The secret is being able to track back and know where that hot lead came from in the first place, and what was successful in moving them along the sales process.
So let’s get down to it, why ROI is important:
Being able to measure the effectiveness of your efforts, and the real-life impact that your campaigns are having, is key to proving why the company needs you. Being able to show a positive ROI can also open doors to increased budgets, but only if you have the numbers to back up your claims.
In a sales-driven environment, it will often down to your figures in the end. You could have the best idea ever for an online marketing campaign, and it could be a huge hit, but ultimately if it’s not leading to sales down the track then your efforts are for nothing. In the same way, you may have hit gold and not even know about it! – just think how important it would be to be able to show that a certain marketing campaign has led to a surge in the best leads the company’s had for years.
You’re unlikely to be very successful if you’re working blind and have little or no idea what’s hitting the mark. And if you don’t know what’s working and what’s not, then how can you plan effectively moving forward?
The most successful marketers are the ones who work fluidly. They are continuously measuring, assessing, adapting, creating, repackaging, retrying, measuring again…..and the process goes on. What they don’t do is press ‘go’ on materials and move on, never looking back.
For the company
Every penny that a company invests in its resources, training, tools and team members needs to be done for a reason. In business it’s very straightforward, you need to get in more than you’re giving out, or there is no business. So the company will expect to see a return on the investment it’s made in marketing.
What you need to be able to prove is the impact that online marketing budgets are having on results, as it will be hard to make informed budgeting decisions if there is no data of this nature available.
We will just add here that ROI isn’t the be-all and end-all when it comes to budget decision making. There are a number of other metrics that should be considered too. As we’ve mentioned above, marketing is not always black and white and its influence isn’t always obvious.
There also needs to be communication between sales and marketing teams, as both teams need to be putting in a strong performance if they’re going to get positive results in the end.
So where should you start when it comes to looking at ROI?
Define and agree the end goals
Begin by defining and agreeing with management what your goals should be. These should be goals that are tied to business objectives. While setting targets for the number of blog posts, social media posts and other pieces of content you will produce is useful, it will not reveal anything about how the activities may have aided the sales process. You need to be looking at ways to measure and record impact.
Check you have the right tools in place
Once you have your goals in place then you need to decide how to measure them. A benefit of online is that it has made it far easier to analyse and track activity and its effectiveness. Standard web analyticstools will be able to tell you what happened – such as website visitor numbers, page views etc. – but not who was doing it. Advanced analytics tools that track IP addresses (the particular computer that was used to visit the website) take this a lot deeper. They allow activity to be linked to an individual and for a detailed picture to be put together of their entire journey – from how a B2B lead found the site, to the keywords they used, whether it was through other referrers, the pages they looked at and where they eventually exited.
Decide what your activity is worth
Now you have agreed your goals and have put processes in place to be able monitor your success in achieving them, the next step is working out what the value of each goal is. I.e. what is each goal worth to the company. You ideally want to get to a point where you can assign a realistic average value. It’s not going to be a quick sum and will probably take a bit of thinking about to get to an accurate answer but it’s going to be a key part of working out your ROI.
Know what channels worked
The next thing to understand is where your website visitors are coming from and which marketing channels are working. This info will be available through your analytics. For offline activity make sure you’re including some sort of code or other mechanism to help you track those ones too. It won’t be as accurate but it’s important to try if you’re investing in those channels.
You should then look at how much you spent on each of these different channels.
Reveal what your ROI actually is
Finally, using all of this information you will now be able to work out what you spent on each channel and what return you got. You can then compare this to the number of times you achieved you goal and what those results were worth. This info will help you see where you’re being most successful and what’s not working quite so well. You can use these insights to help shape your activity moving forward. If something’s working, try doing more of it! This will also give you the facts and figures you need to show how effective marketing activity has been in aiding the wider business objectives.
While the best way to measure and work out ROI will be different for every business, the overall principle remains the same – you’re trying to show that what was spent went on to generate sales for the company that were worth far more.
Having these numbers will mean you know what’s working, you’re not just working blind, and you can make informed planning decisions moving forward that will help you better maximise the returns. In exactly the same way, management may look at the figures and decide to give more backing to the department. Result.