Marketing is an essential function of every business. Smart business leaders know that ongoing outreach to current and potential customers is integral to sustaining a healthy enterprise. Like all business initiatives, marketing campaigns must be monitored and the results measured, to evaluate the campaign’s efficacy and determine how to make adjustments if results do not meet expectations.
The measurement of marketing results can be broken down according to a method recommended by Joseph Raymond Roy, a marketing consultant based in Meredith, NH, who gives us the acronym DATA:
1. Defining, identify the results your marketing campaign is designed to promote
2. Assessing, measure the dollar value of your marketing campaigns (calculate the number of customers and gross revenue)
3. Tracking, determine if customers came to your business as a result of marketing activities
4. Adjusting, do more of what produces the desired result and less of what does not produce results; optimize your marketing activities
Begin the measurement by calculating the amount of money invested in marketing activities. Ideally, time invested is calculated as well, but it may be difficult to attach an accurate dollar figure to one’s time. How much is the time spent networking worth? What is the time devoted to blogging worth? You may develop good relationships with potential referral sources, but the process may take five months or five years to pay off.
The value of speaking engagements and webinars is easier to calculate. Speaking at a well-respected organization always has value, regardless of whether you receive referral business or meet a future client, because the very act enhances your curriculum vitae. To calculate the monetary ROI, deduct the value of resources spent to promote your talk from gross receipts generated by customers acquired as a result of the talk.
Tracking (forward tracking), the process of building an identifying mechanism into a marketing activity before it is launched, enables measurement of each actvities’ results. If you present a webinar, the registration process would include an email address for each listener, making this a useful tracking mechanism. Attaching a code number to a special product offer is another excellent tracking device. The marketer identifies customers who are impacted when they announce the code to receive the offer.
There are other tracking methods as well, including Point-of-sale tracking, conducted when new customers are asked how they heard about your business. Point-of-sale tracking may be used when tallying up sales associated with marketing activities, as revenues generated by promoted items are documented.
Reverse tracking is the process of examining your customer list and documenting how current customers became your customers. If you write a blog or newsletter, measure your reach by counting the number of subscribers, email forwards and followers. Use point-of-sale tracking to learn if your long-form content attracts customers.
The value of PR can be measured in at least two ways. First through media impressions, when the marketer counts the number of media outlets that include a story in response to a press release that was sent. Second through content analysis, when the marketer evaluates the accuracy of what was broadcast as compared to the press release, as well as the prominence of those item placements.
Online data analytics systems track visits to your website. Do potential customers quickly abandon your website? How many visitors follow-up with inquiries, or further engage by clicking on your newsletter or blog? What is the impact of your social media activity on your marketing objectives? Online data analytics reports tell the story.
The ultimate marketing metric is the percentage of your customer base that results from marketing activities, known as Marketing Originated Customers. Providers of intangible services or sellers of big-ticket items may wait 6 – 12 months to garner results to measure. Winning a contract from a client entails a much longer sales cycle than selling groceries. Metrics make it possible to know which marketing activities yield the best results and that knowledge allows you to optimize marketing efforts.
You’ll do more of what works, perhaps launching an advertising campaign during a particular season, or increasing participation in certain business associations. Some activities may be diminished or dropped altogether. The gross sales figure attaches a dollar value ROI to the marketing campaigns and you can compare to the pre-campaign sales volume.
Marketing metrics ensure that you receive the desired ROI from your marketing campaigns. Appropriately chosen and implemented marketing activities that are tracked and optimized always pay for themselves.