Why measuring your marketing ROI is important

All articles | Strategy
Published Dec 20, 2018 | Written by Keith Errington

You’ve spent hours producing content, publishing it and promoting it and now you have to measure its impact and prove Return On Investment (ROI) to the board as well? Isn’t just publishing it enough?

In a word, no.

If you can’t prove your marketing is working, then you are putting effort in for nothing.

  • How do you know it is useful?
  • How do you know it is the best you can do?
  • How do you know your efforts are not making things worse even?

So measuring is essential.

Why do we measure?

There are three good reasons for measuring:

  • To plot progress towards a goal
  • To see what works and what doesn’t
  • To supply evidence of progress to others

The most important thing to remember is that measuring something changes nothing – it is what you do with that information that makes measuring beneficial.

Measuring itself is not the end goal, you measure to provide the data that you need in order to make decisions about what to do.

This is why we talk about actionable insights – the analysis of the collected data gives you insights which should then lead you to take actions.

What should we measure?

In today’s world of data-producing digital marketing, there is no shortage of data, in fact, quite the opposite, so what should we pay attention to and collect?

Well, what we don’t do, is look at what is easy to collect, or what we have the most data from. That’s starting at the wrong end.

The first of our three reasons why we measure was to plot progress towards a goal. So, there is our starting point – a set of goals.

Where should these come from?

Let’s look at the big picture.

Your business has an overall strategy which should contain clearly defined business goals.

The marketing strategy should also have a set of goals that are set up to help deliver those business strategy goals. This is where you should start.

Take those marketing goals and relate them to the specific activities you are performing.

If the business is geared for growth, then your goals should relate to business growth.

If your business is starting out and looking to make a name for itself, then your goals should be related to awareness.

If your business is targeting a new market, your goals should be created around that.

As with most business goals, they need to be S.M.A.R.T. goals:

  • Specific – the goal needs to be unambiguous and specified – preferably with numbers
  • Measurable – you need to be able to collect data that accurately reflects progress towards the goal
  • Attainable – it must be possible to achieve the goal
  • Relevant – it must be relevant to the business
  • Timely – there should be a timescale associated with the goal – a specific date or time period

The M in SMART does not mean that if something is currently unmeasurable, you should simply forget that goal. It is important that you set your goals up first, and then find a way to measure progress. If necessary, put systems, hardware, software and procedures in place to achieve that.

Another valid way of looking at this is to ask what is this measure going to tell us? What questions do we want answering?

We may need to set up additional goals that answer questions like;

  • What is our most effective marketing channel?
  • When do we get the most engagement from our prospects/customers?

These might not directly relate to business goals, but they are important nonetheless because they help you to improve the way you do your marketing and therefore affect the bigger picture goals.

This is the second of our reasons – measuring to find out what works and what doesn’t.

It is almost inevitable that you will be reporting to someone else, whether it be to your immediate line manager, a director, or to the board. So, you will be measuring against key goals to produce reports for others.

In theory, at least, their goals should be your goals, so the task here is to present the information in a format that communicates the progress towards their goals in a quickly digestible manner.

Things change. Markets change. So you should review your goals often. Check they are still relevant. Check that some change in circumstance hasn’t made the measuring inaccurate. Check that they are still meeting your business needs.

What not to measure?

The biggest pitfall that marketers fall into, is mistaking popularity for effectiveness. It is relatively easy to measure how popular your marketing efforts are – how many people read your posts for example or follow you on social media. This type of data is readily available in abundance. But this information is not necessarily useful.

What if you sell industrial equipment and all your followers are actually teenagers? It is unlikely your marketing will result in sales.

What if you have your target market nailed down and they read your posts avidly but never respond or engage?

Yes, you may be popular, but your marketing efforts are clearly not proving effective.

As a general rule, it is much harder to measure effectiveness.

When looking at individual marketing messages you ideally want to know:

  • Have they seen the marketing message?
  • Have they read it?
  • Have they understood it?
  • Have they retained the message?
  • Have they taken action because of the message?

The first and last can be measured relatively easily, but the middle three not so much. Fortunately, the first and last are the most important, with the last of these points being paramount, as that may eventually lead to a sale.

However, this does lead to another issue. That last point above is “Have they taken action because of the message?”

While it is easy to record when somebody contacts you or makes a decision to purchase, tying it back to a particular marketing message or even marketing channel, can be pretty difficult.

Given the great number of marketing channels out there and the influence of peers, colleagues, industry experts, key influencers and even family, it is very difficult to say what actions were taken because of what marketing messages. Often it is a combination of influences that will cause a prospect to make the decision to buy from you.

This is all further complicated by the fact that B2B business purchases are often the result of a number of people coming to a decision jointly.

How to measure?

There are a number of sources for your measurement data. Social media platforms provide a wealth of data, good email marketing platforms have reporting, blogging software has built-in analytics and for your website, there is Google Analytics. You may also need to look at data from your contact management system too – for phone calls and emails.

It’s perfectly possible to set up each of these varied channels to collect data and then look at all the different reports, export data, collate, number crunch in Excel and relate all this back to your overall marketing goals. But that is quite a lot of work.

Besides, managing all those channels on a day-to-day basis is time-consuming too. Inevitably, most marketers will look for, or use a system that can manage as many of those channels as possible and that automates as much of the reporting as possible.

Here at Equinet we use and promote to our clients, HubSpot – precisely because it can manage these channels and the related sales and marketing activities from one central hub.

Managing all the activity in one place means it’s easier to tell what marketing message triggered what response. What’s more, once configured, it can deliver reports on progress towards your goals, saving you endless hours collating and analysing data. Linked to Google Analytics monitoring your website, it’s a powerful system.

Make sure the things you measure are the right things – the useful things – or you will waste a lot of time and your marketing strategy will be based on false assumptions.

By measuring progress towards meaningful goals you can improve your effectiveness and deliver an efficient, successful marketing strategy that you can prove works.

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Published by Keith Errington December 20, 2018
Keith Errington