Marketing is an essential function of every business. Smart organization leaders understand that continually reaching out to current and potential customers, with objectives to create loyalty and trust in the company, its products and its services and building a brand, are integral to sustaining a healthy enterprise. Like all business initiatives, marketing objectives and strategies must be periodically evaluated, to monitor and measure results and determine how to adjust and optimize the program if results do not meet expectations. Choose your marketing activities based on your knowledge of customer behavior.
The measurement of marketing results can be broken down according to a method recommended by Joseph Raymond Roy, a marketing consultant based in Meredith, NH, who gives us the acronym DATA:
1. Defining, identify the result your marketing will promote (increasing the number of potential customers)
2. Assessing, measure the dollar value of your marketing program (look at the number of customers and gross revenue)
3. Tracking, determine if customers came to your business as a result of your marketing activities (ask new customers how they found you, or all customers in a survey)
4. Adjusting, if it is obvious, do more of what produces the desired result and less of what does not produce results. In other words, optimize your marketing activities.
Begin the measurement by calculating the amount of money invested in your marketing activities. Obviously there is also time involved, which should be taken into account, but it is usually difficult to attach an appropriate dollar figure to one’s time. How much is the time you spend networking worth? What is the time spent on social media worth, or producing your monthly newsletter?
You may develop good relationships with potential referral sources, but it may take 5 months or 5 years to receive a referral. Speaking engagements and webinars are easier to evaluate. A well-respected venue always has value, whether or not you receive referral business or meet a future client, because the very act adds value to your curriculum vitae. Calculate ROI by deducting the value of resources spent on marketing activities from revenues generated by customers who have come to you as a result of marketing activities.
Tracking (i.e., forward tracking), the process of building an identifying mechanism into each marketing activity before it is launched, so that you can measure the results derived. If you present a webinar, the registration of participants, which includes an email address for each listener, is a most accurate tracking mechanism. Responding to a product offer with a special code is another excellent tracking device. The marketer will be able to identify which customer was not only impacted by a certain activity, but also will know if that person eventually does business with the company.
There are various types of tracking methods, including Point-of-sale tracking, conducted when new customers arrive by asking them how they heard about you. You will also use point-of-sale tracking when you tally up the sales results associated with the purpose of your marketing program, be it bigger ticket items, referrals, or other customer actions. Reverse tracking is the process of going through your customer list and documenting how current customers became your customers.
If you write a blog or newsletter, measure your reach by counting the number of subscribers, email forwards and followers. Point-of-sale tracking will let you know if demonstration of your knowledge and expertise brings customers into the door.
The ROI of PR should be measured in at least two ways: first, through Media impressions, in which the marketer counts how many media outlets wrote a story or made a radio or television announcement in response to a press release that was sent (a follow-up phone call will likely boost the response rate). Second, through Content analysis one can evaluate the accuracy of what was broadcast as a result of the press release and the prominence of item placements in the chosen media outlets.
Online data analytics systems will track all visits to your website, customized to your needs. How many potential customers abandon your website and how many follow-up with inquiries or engage by clicking on your newsletter or blog? What is the impact of your social media outlets on your marketing objectives? Here is how you’ll know.
The ultimate marketing metric is the percentage of your customer base that result from marketing activities, or Marketing Originated Customers.
It may take a service provider 6 – 12 months to have results to measure. Obtaining a contract from a new or returning client is a longer sales cycle than selling ice cream cones. Metrics make it possible to know which marketing activities yield the best results and that knowledge will give you the opportunity to optimize your marketing efforts. You will do more of what works, perhaps launching an advertising campaign during a particular season or increasing your participation in certain business or professional groups. Other activities may be diminished or dropped altogether. Gross sales will give a dollar value ROI to your marketing program when compared to the pre-marketing program value.
Marketing metrics ensure that you receive a solid ROI on your marketing activities. Appropriately chosen and implemented marketing activities that are tracked and optimized will always pay for themselves.
Thanks for reading,