4 Ways to Measure Marketing ROI and Show the Boss Your Plan is Working

If You Can’t Link Marketing Efforts to Leads, Conversions, Sales and Profits – You’re Doing it Wrong! Here are Four Ways to Revitalize (or Launch) the Way You Measure Marketing ROI that Leads to More Sales

Measure Marketing ROI: Can’t Link Marketing Effort to ROI? You’re Doing It Wrong!

A recent survey points to gaps in marketing proficiency when it comes to the way marketers measure marketing ROI (return on investment) in a meaningful way. Here are four ways to improve (or begin) measuring your marketing efforts to grow your business.

According to a new report from Adobe, only 40 percent of marketers — the people who are actually getting paid to accomplish marketing goals — rate their company’s marketing as effective. Given that more than half also said they were ill-equipped to measure marketing ROI, it follows that the area where marketing professionals indicated their biggest gap lies – marketing measurement – could well be the biggest reason for such a low score when it comes to marketing effectiveness.

Why?  Simple. What gets measured gets done. (By the way, what gets measured and incentivized gets done even better!)

Maybe the reason survey respondents scored their own marketing effectiveness so low is because they lack the time, tools or knowledge to properly gauge the effectiveness of their marketing and an inability to tie marketing ROI (return on investment) to actual sales, improved profitability and bottom line business growth. Here are four ways to improve the way you measure marketing efforts to generate leads and sales and improve the profitability of our business.

4 Ways to Measure Marketing ROI and Know Your Strategy is Working

1. Set baselines – where are you starting from?

• Current number of customers
• Leads in the pipeline, leads produced in an average week, month or year
• Ratio of leads to customers (how many leads, on average, do you need to acquire to produce a customer?)
• Number or estimated percentage of leads produced by marketing channel (website, email marketing, direct mail marketing, telemarketing, tv, radio, print advertising, salespeople, agents, brokers, etc.) In other words, where do your leads come from?
• Plus, baselines for each of the marketing channels you employ (and for each that you launch going forward) such as number of followers, subscribers, web traffic, click through rates, etc.

2. Budget more than money – where are you going, and how long should it take you to get there?

• Team and individual time for tracking, communicating, analyzing and adjusting the marketing plan, every week, month, quarter, etc.
• Specific goals, tactics and timelines relative to major segments of your target markets
• Specific goals, tactics and timelines for each of the marketing channels you employ

3. Allocate and deploy the right tools – how will you get where you want to go?

• Launch and maintain as many marketing channels as possible that are likely – in relationship to your target markets – to attract and educate leads
• Consistently spend the most time and money on the marketing channels that yield the most returns (not necessarily the ones that are cheapest or easiest to manage)
• Employee motivators such as incentives, recognition, contests and celebrations – as well as directly-related employee consequences, performance improvement and contingency plans if needed

4. Identify tipping points – what usually happens when you get it right?

• What is the typical buying cycle and timeline needed to convert a lead into a customer?
• How much (and what type) of customer education is needed before the buying decision usually occurs?
• How much research do customers typically do about your industry, products or services before they begin to narrow their choices?
• What actions or stimuli trigger a customer to move from shopper to buyer?
• What arguments are persuasive (or what do customers share in common) in up-selling to a more expensive model or for add-ons, upgrades or accessories?
• How strong does a customer’s need or desire have to be before they pull the trigger?

Finally, if your business is new or you have yet to implement meaningful measurements for your marketing and sales departments remember that it’s perfectly ok to start small, but you need to measure marketing ROI to know what’s working. From small beginnings come great endeavors; hone in on the baselines and goals which are most critical to your business first, and build out marketing measures from there.

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