There’s a saying in the paid search world that says something to the effect of, “PPC done right is free.” The point being that your paid search efforts, when done effectively, will generate more revenue than they cost.
Though it’s not as exactly cut and dry for other areas of digital marketing (such as hard-to-track performance metrics surrounding brand equity), the fact remains that ROI should always be a marketer’s first priority. Nothing proves the viability of digital or inbound marketing more than return on investment.
The goal of this article is to help displace the myths around marketing ROI and how to calculate marketing ROI quickly, without getting caught up in clunky spreadsheets.
Once you read through our tips on paring down your data, we recommend our marketing ROI calculator to help you get the proof you need on how marketing generates website visits to leads, and leads to customers.
Don’t Forget to Have Data Collection Set Up Properly
We can’t simplify data if we don’t have any data to go on.
Additionally, many organizations think that their analytics or tool suites are automatically collecting data for them, but due to API changes, staffing switches, or irregular analytics monitoring, you may not be collecting all the data that you think you are.
Remember, the two biggest contributing factors of a sound, data-driven marketing strategy are data quality and data quantity.
Below are some of the areas that you should check to ensure you are capturing all marketing leads:
- Social Media: If you are running Facebook ads, you need to have Facebook Pixel set up. This will not only show you proper conversion rates from Facebook campaigns, it can also help properly optimize your campaigns to ensure they are only being shown to users that have a higher chance of conversion, thus making campaigns more cost effective. Though they don’t currently track conversions, Twitter and Instagram also have their own analytics that should be pulled and analyzed every month.
- Proper Website Analytics: Surprising to many marketers, quite a few organizations don’t have website analytics set up at all. If your website has gotten a redesign or new CMS in the last five years, website analytics may not be implemented properly, since the tracking codes are always improving. Many marketers prefer Google Analytics, which is free to use.
- Call Tracking: If a customer sees a Facebook ad but chooses to manually dial the company’s phone number instead of following a call-to-action on the ad, it can’t be properly credited to a Facebook campaign. Consider implementing call tracking from a service like Call Rail or Invoca to better decipher where leads are coming from. You should also work with support staff to ensure they are always asking customers or leads where they heard about the business.
Once you are getting all your data from every possible resource, it’s time to narrow it down to focus on what matters.
Focus on Key Marketing Metrics
As an industry, we are addicted to data but we don’t always use it like we should. Many times, marketers will send their clients or superiors reporting spreadsheets that have columns and columns of data points, but this usually does nothing to “impress” the recipient or tangibly impact marketing strategy development.
In fact, it can cause data fatigue, which may lead to them tuning out or shutting down.
When it comes to proving marketing ROI, it’s important to only focus on what matters, and forget everything else. Pull out five metrics (or less) that you know your manager or client will want to know, and build your report based on those numbers. For many organizations, metrics based on conversions and revenue are pivotal.
For other metrics, decide whether or not to keep them by giving it the “new hire” test. Could a new hire to the company pick up the report and determine whether or not marketing efforts have lead to increased revenue or conversions? If not, the metric shouldn’t be included unless specifically requested.
While other data points like Facebook engagement or time on site is interesting to a marketer (and important to know), it usually isn’t of interest to the client. They just want to know if what you are doing is working or not...with proof.
Focus your data gathering on metrics that prove the value your work, not offering as much data as possible.
Base Marketing Goals on “What Moves The Needle”
At the same time you’re deciding on the core metrics to include in your regular reports, think about what goals would be applicable that could help increase these metrics.
For instance, if your past data has shown a correlation between time on a product page and a conversion rate (meaning, the more time a customer spends on a product page, the more likely they are to make a purchase), then marketing should spend its time on fine-tuning aspects of the product page that increase time on those pages. This could mean A/B testing usability elements, buttons, or related product recommendations.
Think about what directly correlates to higher key metrics (like a higher conversion rate or more revenue) and work backward to figure out your goals for the month, quarter, and year. Some projects take months to accomplish (like creating more white papers or landing pages), while others could be simple tweaks that are checked periodically (like social sharing buttons on product pages or blog post). By knowing what works first through the data, you can figure out what to focus on in the months ahead.
By narrowing down your data to only focus on the key metrics that matter, you are able to prove your marketing ROI quickly and save customer or client’s time and energy, which makes them more engaged and open to an evolution of what is already working.
Use Our Inbound Marketing Calculator To Find Your ROI. Genius.