There’s no need to be ashamed; We’re all guilty of it. As marketers, we (too) often rely on “feel good” measurements to justify our marketing spend instead of pursuing metrics that measure business outcomes and improve marketing performance and profitability.
You know what I’m talking about, and it’s not hard numbers…it’s things like press release impressions, Facebook likes, or maybe we just have a good ‘vibe’ about it. Whichever way you rationalize it; your CEO expects more than the ‘feels’ to justify marketing spend.
With 89% of marketers ranking improving the ability to measure and analyze marketing impact as a top priority, it’s no secret that proving our value with facts and figures is top-of-mind for all of us.
Before you summon the troops to determine how you want to measure the success of your marketing efforts, ask yourself these five questions: (hint: the answers to these are exactly what your key stakeholders want to know to justify marketing spend)
- What are your specific objectives for marketing investment and how will you connect your investments to incremental revenue and profit?
- What impact would a 10% change in your marketing budget (up or down) have on your profits and margins over the next year? The next three years? Five?
- Compared to relevant benchmarks (historical, competitive, marketplace), how effective are you at converting marketing investment into revenue and profit growth?
- Which are appropriate targets for improving revenue leverage (defined as dollars of profit over dollars of marketing and sales spend) over the next few years? Which initiatives will get you there?
- What questions do you still need to answer in regards to the return on marketing investments? What are you going to do to answer them?
To accurately determine the success of your marketing programs and make any course corrections necessary, here are a few key metrics to adopt, measure, and monitor.
Why these, you ask? Because they provide a crystal-clear picture of key buyer motivations and decisions at every stage of the funnel. You’ll reap the benefits of getting tons of insight to incorporate into your strategies.
Once you’ve analyzed the data, you’ll know what you’ve been doing that’s right, what may be wrong, and how you can get even better results in the future.
Lead Volume & Close Rate
It may seem counterintuitive, but lead volume is an outdated metric. Especially when it stands alone. But when tied to your Close Rate, it shows how effective your acquisition and lead nurturing programs are (or aren’t). It’s also a great metric to shine a light on any sales and marketing alignment issues and focuses efforts around scoring and lead definitions.
Time to Close & Cost-Per-Close
Velocity reporting, or how long it takes a given lead to move through your funnel, should be a cornerstone of your reporting. This clutch report will let you know how long it takes on average to close each customer, and what you’re spending on average to achieve it.
A quick tip here is to build velocity reports and cost metrics around each buyer persona that you are targeting. Remember, different buyers act differently — one-size-fits-all is always a nonstarter, even when it comes to reporting.
Calculating the revenue delivered by each customer will clue you in to quality of the leads you are bringing in.
Ultimately, the logic is simple: The number of leads needs to be offset by quality of leads. Think of it like this: quality leads to conversion, which then leads to revenue. So, to build an intelligent metrics program, you must work backwards and base your marketing targets off revenue – specifically, marketing-sourced revenue. Only then will you have the knowledge you need to craft killer initiatives that deliver the best results in spades.
Done? Now you have a good handle on the motive behind the measuring, here are our six secrets to successful marketing measurement that you and your key stakeholders can agree on:
- Choose no more than five key metrics
When you try to focus on too much at once, lines blur and you lose sight of what’s really important. Get with your key stakeholders to determine five metrics that everyone agrees will prove marketing’s value to the organization.
- Measure success versus goals
The end goal is important, but don’t neglect the success you see along the way. Track the success for every campaign, channel, sales rep/region, and product.
- Show trends for those metrics over time
With a solid list of metrics to track, over time, you’ll be able to recognize trends. It will become glaringly apparent where you’re improving and where you’re not.
- Put on a dashboard for everyone to see
Prove to everyone that marketing is more than just the ‘fun and games’ they imagine it is. Represent your success with a dashboard so there is always a clear view of what marketing is trying to achieve, and where you currently stand.
- Have recognition systems tied to goals
Make sure top contributors are recognized! It takes a village (aka multiple departments) to make marketing efforts successful. Find a way to ensure credit is given for goals met.
- Rinse & repeat
The best performing companies track results weekly, monthly, and quarterly – so they can improve just as often. We all know consistency is key. Make measuring results a habit, not a one-time thing.
More bang for your buck
A comment made over a century ago by John Wanamaker, founder of one of the first U.S. department stores, still hits close to home today: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Don’t be left with the same sentiment. Add the secrets above to your marketing measurement repertoire and you’ll be able to account for every marketing dollar.
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