The big question with a marketing campaign is: Did it pay off? With finite resources to spend, your marketing needs to focus on the campaigns that net the greatest results.
The key to tracking return on investment (ROI) from your marketing is to shift your thinking from just direct measurement to this more strategic mindset.
Measurement tells you how many views, clicks, emails, calls, shares, likes, purchases and other measures your campaign gets. A return-on-investment focus takes that measurement information and then compares it with all the effort expended. The final result is a percentage that illustrates the payback you received for your expenses.
If you have a number like this for your marketing efforts — even a back-of-the-envelope calculation — it can very quickly become clear what projects are the best use of your time and financial resources.
Use the following steps to create a powerful marketing ROI calculation.
Set a measurable goal
You can only track payback on a specific goal. Anything too general is difficult to measure. Narrow your endpoint by deciding whether your objective is to build brand recognition, capture new customers or retain existing ones. Then dig deeper, setting specific, quantifiable goals that really zero in on your target.
For example: “At least 100 Facebook followers will share our new product photos by the end of June,” or, “Our print ad campaign will result in 200 new newsletter subscriptions in the next six weeks,” or, “Our customer loyalty card program will generate 500 repeat visits by cardholders this year.” To help you set realistic goals, read marketing case studies that describe campaigns similar to the one you have in mind — research a selection of different campaigns to provide as much context as possible. Also, use historical data to set a baseline for comparison – you know your business and your industry and are able to assess what’s realistic.
A huge variety of products can measure your marketing campaigns, so explore your options and use the right technology to gauge your progress. These tools will enable you to see what kind of payback your efforts are producing.
For example, setting up Google Alerts for your company name will let you know where you are showing up online. Google Analytics measures your website’s performance by tracking the number of visitors who clicked on your site, how long their visit lasted, and other web traffic information. Constant Contact shows click-through rates and other readership data on your email newsletters. TweetDeck or HootSuite™ measure the impact of your Twitter campaigns and, once you have more than 30 Facebook followers, Facebook Insights will show you how those people are interacting with your page.
Continually compare new results to earlier ones to learn how your target audience behaves and to determine how to tweak your campaigns. If you adjust your approach, clearly make notes on the kinds of changes you made, and when you made them — otherwise you won’t get detailed measurements on your progress. In aggregate, the data you collect will tell you a story about the tactics that pay back the most.
Compare the time, effort and money you invested in a campaign with what it yielded. In most cases, this won’t be a just matter of weighing dollars out against dollars in. Assemble a complete picture of the effort by looking back at the time you spent setting goals for the campaign, your team’s time in launching and monitoring it, and other efforts.
This effort and your return number will combine to let you know how your campaign is paying off. To keep the calculation simple, subtract your effort or investment from the return generated to get a profit number. Then calculate your ROI by assessing what percent of your investment this return represents (ROI = Return ÷ Investment). Armed with this number, you may be able to see how you can do an apples-to-apples assessment across projects to determine which generates the best marketing ROI. For help with your calculations, check out the ‘‘How to Calculate an ROI’ worksheet.
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