Tips for determining marketing ROI
Any time you make a significant investment, you want to make sure that investment is worth your while. Measuring results is the best way to reinforce the value of a thing and prove its validity. Sometimes, though, it isn’t so easy to track and determine success or failure. Marketing is one area of business that many business owners are often confused about.
“What will the return be on my marketing dollar investment?” We hear this question often.
Here, we’ll share tips of how to gauge what your marketing ROI is that you don’t need a degree in marketing to do.
1: The time comparison.
Most marketing strategies take a period of time before they gain momentum to bring measureable results. Different strategies require different commitments, and it’s important to understand that at the outset. But after there’s been enough time for a campaign to gain that momentum, choose a specific metric (overall sales, website hits, Facebook likes, etc.) and start comparing metrics with those from a month ago, 6 months ago, and a year ago.
If your goal is more website traffic, take snapshots of your analytics. If your goal is increased sales of a specific product or service, carefully track the origin of that item’s sales and compare against sales historically. The key here is having a clearly identified goal, and a clearly identified method for tracking results. Knowing what your sales were and what you hope they will be as a result of your marketing will help you stay on track and pay attention to the right metrics.
2: Map how people find you.
This is one of those obvious tips that really is so simple, it often gets overlooked. Ask your customers how they found you. Keeping track of this will tell you what marketing works, and what doesn’t. You might be surprised at the avenues some of your customers used to find you.
Pay attention to what kind of customers find you through which channels. You might be inadvertently marketing to a group of people who aren’t your ideal client, and you may need to re-message that channel. It’s more difficult to track the value of brand exposure, but starting with the actual tracking of sales conversions will help you know where to focus your time and resources in a way that reaches your demographic.
3: Use unique identifiers.
There are two easy ways to do this: custom URL’s and promo codes. Custom URL’s could be a shortened link (bit.ly or ow.ly are commonly used shorteners) through an account that allows you to track how many clicks the link gets, and where the clicks came from. You could also have a custom URL where a landing page is created for a specific marketing campaign, for example: www.yourname1.com instead of www.yourname.com.
Using promo codes specific to each outlet you use is another great way to track results. For example, let’s say you own a clothing store and you’re going to run ads on Facebook, Google+, and Foursquare about a holiday sale you’re going to do. For each media platform, you create a separate promo code: holiday15, holidaysale15, and sale15. Keeping track of which codes are used will give you insight into where you’re getting more customer engagement.
The fact is that marketing dynamics change frequently, especially online. What worked a year ago may not work the same today. Thus the measurements are changing, too. This article does a good job explaining that sometimes the metrics we focus on, especially in social media marketing (likes, followers, etc.), aren’t always what we should be focusing on.
Having a clearly defined goal for your marketing campaigns is key to having the right perspective when it comes to understanding the value of your investment. A company with the goal of seeing their Facebook page get to 5,000 likes in 6 months will have a very different way of measuring success than a company with a goal of using their Facebook page to really connect with their audience on a more personal level.
How do you track your marketing to know what your ROI is? What have you found works, and what have you found DOESN’T work?