Return on investment (ROI) – the holy grail for any marketer – and a point at which every marketing director wants to be in order to clearly demonstrate the impact that marketing activity is having on the business’ overall profitability.
ROI puts marketing departments in a position where they can justify their marketing spend and – with the CEO and board of directors now on board with the value of marketing – formulate a plan for future growth.
But measuring ROI – even with the array of analytics tools that we have today – can be difficult if activities are not aligned or reported on from one central tool.
So, to help marketers (and salespeople) with achieving accurate and detailed ROI reporting, we’ve collated a few top tips you can start using straight away.
Tip #1: Focus on the metrics that matter
In other words, don’t report for the sake of reporting.
There are so many data points that you could potentially report on in 2018. Marketers, more often than not, find themselves measuring the easy things – what we call ‘vanity metrics’. Likes, clicks, and follows; these metrics are easily manipulated and may not correlate to the conversion stages and metrics that actually matter, which include:
- Visitor to lead
- Lead to customer
- Visitor to lead rate
- Visitor to customer rate
- Conversion rates
These will provide you with a better understanding of how you’re performing against your original goals.
But that’s not to say likes, clicks and follows are irrelevant, of course. These metrics matter in the overall scheme of your marketing activity, but they are not the final representation of your performance.
Tip #2: Align everything you want to track in one place
Not only does housing your data in one platform streamline your reporting procedures, it also prevents duplications of data, incorrect tracking, and difficulties measuring ROI. Your marketing is composed of a number of moving parts, all of which require your attention in the grand scheme of things. With this considered, you want to be able to monitor that marketing activity from one place rather than ten.
Tip #3: Go beyond the metrics and paint a picture
Having a plethora of statistics relevant to your business is great, especially if they portray improvement. However, it needs to be a layered report that contains both a top-level view that enables you to visualize your overall marketing, as well as a more detailed and comprehensive report which looks into individual variables.
Essentially, you want to have a dashboard which will serve to show your CEO and board of directors how your marketing has improved X% overall, but also have another level or section of reporting which your analysts and marketing managers can decipher and utilise to improve marketing campaigns.
Tip #4: Develop an ROI calculation
In most B2B businesses, sales directors can identify the basics, and by this, we mean the ratios of:
- Opportunities needed to make a sale
- Sales qualified leads to opportunities, and
- Marketing qualified leads to sales qualified leads
This, however, is just the minimum calculation your business needs to be able to make. In an ideal world, you want to be able to clearly distinguish the activity at every stage of your sales funnel, the percentage of activity that transitions to the next phase, and how much each final sale is worth to the business. In essence, this means monitoring, tracking, and analyzing your leads as you go – and comparing your activity with the final sale.
Tip #5: Choose the right attribution model
In both B2C – and more so in B2B – there are multiple touch points involved in the buyer journey. A customer – your buyer – can engage with your business in a variety of ways.
For example, they might:
All of this could occur before any decision to purchase has been made. And even once the decision to purchase a product or service has been made, what channel do you attribute to the final sale?
In this instance, it can be difficult to decide what channel was the most effective at introducing that revenue to the business, and even if you can track the path to purchase, which channel had the most influence on that final decision?
This is where marketing attribution models come into effect, although some analytics platforms and attribution models will differ in terms of measuring ROI and what they are called. The fundamental purpose of attribution modeling is to provide a holistic and intricate overview of your return on investment for the activities you are conducting so that you can enhance them further and optimize your current budget to deliver greater value.
Attribution models help you to understand which channels drive the most activity for your business so that you can better allocate your marketing expenditure to generate the most qualified leads.
At BFO, we provide specialist reporting services – including attribution and source reporting – to help compile reports on your marketing channels which include your performance and our suggestions on how you can improve those channels and generate more leads.
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