Measuring and duplicating business success involves tracking your return on investment (ROI). Digital marketing is no different. In fact, measuring marketing ROI is most important because marketing is such a critical revenue-generating activity.
The first question you need to ask yourself is what do I need to track ROI? Do you have access to the information? What platforms is that information residing within and is that information consolidated into one dashboard so that you can look at all the different variables?
Tracking marketing ROI is critical.
This is a critical Step 1 – understand what variables goes into tracking your ROI and where that information resides.
Once that is completed it is time to calculate ROI, however let’s start with the basics and understand how ROI is calculated. As a general rule, ROI is calculated by taking the return generated from an investment minus its cost and then dividing this amount by the cost of the investment.
Marketing ROI includes tracking the number of qualified leads generated by a campaign, the number of leads closed, the value from sales, and perhaps most importantly, the amount of customers retained over time. Admittedly, all of these variables makes calculating marketing ROI a little more complicated. However, the basic rule applies: Define what you achieved from each campaign and track results. So, what does it take to measure your digital marketing campaigns and why is it so important?
1. Cost Reduction and Improved Performance
If you can generate more leads, win more customers, and keep more of those customers for every dollar spent on marketing, then you have increased your marketing ROI, reduced your costs and increased your marketing’s performance. However, you can’t do any of those things if you aren’t measuring the performance of your digital marketing strategies. Otherwise, you’re leaving it up to assumptions and that doesn’t work.
2. Tracking Click-Through Rates
Defining how many leads you generate involves tracking click-through rates (CTR) on individual digital marketing strategies. However, it’s not just about how many prospects are sent to a specific website landing page or the number of times users opt for free downloads. It’s really about taking that analysis a step further and understanding what happens afterwards. After all, you can generate a ton of incoming traffic and customer actions, but if none of those actions produce results, then why bother?
3. Optimized Website and Digital Platforms
If all you do is measure the number of leads generated, without going a step further, then you’ve missed the boat entirely. Success means having a website that’s optimized for incoming traffic so that more leads are turned into sales. This means tracking conversion rates. In the end, there’s nothing gained from having visitors come to your landing pages if your call-to-action (CTA) isn’t working and you’re not closing on opportunities.
Staying committed is vitally important.
4. The Importance of Data, Metrics, and Analytics
Digital marketing is powerful because all the tools you need are at your fingertips. You can define costs down to every penny you spend online. Most importantly, defining costs of customer acquisition and retention is much easier through digital marketing than it ever was with outbound strategies. Here are a couple of things to keep in mind.
- Google Analytics: It’s free, has a ton of information, and allows you to track performance in real-time. You’ll know what keywords work best, which digital strategies produce the most leads and how effective your landing pages are at converting traffic.
- Content: Ultimately, content is still king but only if you’re able to properly measure its effectiveness. This involves tracking the number of actions customers take and the end result of those actions. Don’t just be satisfied with the number of downloads or requests for information. Take it a step further.
- Mobile-Friendly: While not a measuring tool, it’s important to understand that having a responsive design is critical today as mobile searches vastly surpass laptop searches. Being mobile-capable has a direct impact on performance. This means having a mobile-friendly website and email marketing template that is responsive and adjusts to different mobile screen sizes.
- Eliminate Unnecessary Steps: Don’t get bogged down in trying to calculate marketing man hours. Yes, at some point those costs may come into play. However, you job will be much easier if you stick to tracking our aforementioned variables. Use the costs of digital campaigns as your costs overall.
Get used to tracking the results of your digital strategies. It will help you nail down the most effective approaches and ensure that you’re properly allocating your budget to the right revenue-generating strategies.
If you need guidance on how to go about defining, measuring and tracking the performance of your digital marketing strategies, contact us, we can help.