Measuring the return on investment from your online marketing can be a challenge for anyone. But, there are a few tactics and tools you can use to measure your marketing efforts and get a better idea if the money you’re spending on marketing is working. The science of marketing ROI is more than a simple calculation; it’s figuring out the entire process, from setting goals, to selecting the right marketing tactics, to tracking your metrics. Here are a few tips to help you measure marketing ROI.
Determine Your Marketing Goals
It all starts with setting up the right system, and sometimes, less is more. When it comes to your online marketing, you don’t want to get bogged down measuring every single possible metric. Instead, you need to focus on measuring the metrics you can – and want – to be able to take action on. So, first, determine what goals are most important to your business and find a metrics you can measure that are related to each of these goals. For example, if your goal is to increase awareness of your brand, you might want to track and measure how many impressions your marketing programs are receiving. Then, once you know what goals and metrics you want to track, determine which marketing tactics will best enable you to achieve those goals. In this example, display advertising and Web Presence Optimization may be the best fit. Whatever tactics you choose, it’s important to benchmark your current metrics for each of these goals and then make sure you follow up with your campaigns regularly to see how they’re performing.
Track Phone Calls
One simple metric to help determine the ROI of many types of marketing campaigns is with a call tracking number. You can assign different tracking phone numbers to different online and offline marketing campaigns; for instance, you could use one number for your online ads, one for your television ads, and one for your print ads. Then, when a prospect calls you from one of your tracking numbers, you’ll be able to determine which type of marketing initiated that call. Many call tracking technologies also enable call recording, so you can also track trends and identify issues related to your business or your marketing. Call tracking can be a very useful metric in helping you determine what marketing tactics are bringing leads your way. By comparing the number and quality of calls you get from different marketing sources, you can evaluate the value of each different marketing investment.
Use Custom URLs
Custom URLs are similar to call tracking numbers, except that they are used primarily to generate clicks via online marketing efforts, like text ads, display ads, social media marketing, and email marketing. Custom URLs let you track the source of your clicks, so you can see the top sources of your online traffic. By directing your custom URLs to specifically engineered landing pages with well-crafted calls to action, you can better measure the impact your online marketing investments are making.
Ask Customers How They Heard About You
Make it a part of your marketing strategy to ask new customers how they heard about your business. It’s a good idea to identify a specific list of all the different marketing tactics your business is using. Be specific, and update this list every time you add a new marketing tactic to the mix. Then, create a system to help you capture this information so you can directly measure what marketing is driving customers to your business. For example, you could create a section of a new customer form that requests this information. Or, you could create a system, prompt, or card that reminds employees to ask for the information and record the customer’s name and referral source whenever they perform a transaction. Then, once you start collecting this information, check it frequently so you can see where your traffic is coming from and make informed decisions about what marketing efforts you are investing in.
Tap Into Analytics Tools
There are many online tools you can leverage to make sense of your online marketing efforts. Free and inexpensive tools like Google Analytics, Twitter Counter, as well as the analytics built into sites like Facebook and YouTube, can provide a snapshot of your efforts on your website, blog, and social media sites. In addition, there are more advanced paid social media monitoring and website analytics tools for businesses that can help you track your marketing efforts and determine ROI. For example, if your goal is to build your social media fanbase in order to reach more customers and prospects, a system can help you track your growth regularly.
Measure Social Media & Create Campaigns
Social media marketing is one of the most difficult marketing tactics to translate into real return on investment. In fact, 57% of businesses struggle with social media ROI. So to start, focus on the few metrics you want to measure, such as fans and follower growth, engagement, and site traffic, and make sure they are tied to specific goals or campaigns. For example, if you create a special offer for your social media fans, you should not only measure the number of new fans the campaign created, but also the redemption of offers at your store by creating a unique redemption code that is tracked by your staff or point-of-sale system. This can help you understand how your social media marketing can translate into in-store sales.
Tie Efforts Back to Investment
Once you have benchmarked and begun measuring performance metrics, you can start to tie them back to sales, customer retention, and other values to gauge your marketing ROI. Plus, understanding and measuring how your different online marketing tactics are working can equip you to calculate the potential lifetime customer value that is created by each marketing effort’s results at driving new customers to your business.
At the end of the day, your marketing ROI is only as good as the formula and system you put in place to measure it. Not only is it important to create a solid method for measuring online marketing success, but it’s also critical to review your efforts frequently and change both your monitoring tactics and your marketing efforts to ensure you are achieving the marketing goals you have established for your business.
How are you measuring your marketing ROI? Have you found any free or paid tools that have made it easy to monitor your online marketing and determine their effectiveness? Share your thoughts in a comment.
About the Author
Tamara Weintraub helps equip small business owners with information about local online advertising, social media, and content marketing as a writer for the ReachLocal blog.