How to Measure Your Marketing ROI
At the end of the day, profit is what drives business. Before a customer decides on any kind of venture, we often want cold, hard proof that the investment will deliver profit, and that it will be worth continuing to invest in in the future.
So if your marketing team isn’t measuring its ROI, it may as well be doing the old school method of ‘spray and pray’ marketing that was oh so popular with outbound marketing. Your business could be losing money as a result.
Here we want to show you how to track and calculate your online marketing ROI, eliminating the guesswork of more traditional methods.
Your Marketing Budget
You can’t track the success of your marketing campaigns results unless you know what was invested into marketing in the first place. It’s far too easy to wait until you hear the quote before thinking about budget, but that’s looking at things the wrong way round. If you know you’re going to see results from your investment, you can decide beforehand what you’re prepared to invest in growing your business, and then write out the numbers. When you set out your budget, make sure you account for any and all internal and external costs.
Your Marketing Expenses
This isn’t the same as developing a budget. Track your expenses to keep tabs on how much money has gone into your different venues of promotion, ie Google Ads, Facebook Ads etc. Note down how much has been invested in your different types of advertisement, and whether you’re marketing to new buyers or recurring ones. Armed with this knowledge, you really can get the best bang for your marketing buck.
Your Marketing Results
In order to judge how effective something is, you need to be able to measure what’s coming in to your business as well as what’s going out. For example, you could ask customers who are buying where they heard about your business or offer. This enables you to directly attribute their sale to the marketing strategy that had brought them to you in the first place, like using UTM parameters for online purchases.
So, you want to be aware of what sales you’re conducting are a direct result of your marketing strategies, and which are bringing in more buyers - are they finding you based on a certain type of organic search? Your presence on social media? Your advertised discounts hosted on another website? Knowing where the sales are coming from will help you streamline your marketing and help you plan your marketing strategies in future.
To make this part easier, you could consider making use of software that brings all of your marketing aspects together. HubSpot is one of these types of software, and it’s really helpful for calculating ROI, as well as the overall success of your online marketing, as it allows the user to always discover how many website visits, leads and sales your marketing campaigns are producing.
Your Marketing Future
Like I said at the very beginning, today’s marketers must demonstrate a clear, measurable contribution to the profit of the business. This means you must be able to track and measure your campaigns impact and you must be able to analyse all of this data to draw insights, properly allocate budget and demonstrate ROI. This is critical to the success of any marketing team.
Inbound marketing owes its success, in no small part, to the ability to track marketing results, due to the software used. Because so much of the inbound marketing model takes place online, it is relatively easy to check where a new lead has come from and what marketing strategy brought them to your website, as well as what made them convert from a lead into a paying customer.