The days of tracking performance merely by page hits, site visits and unique visitors is a distant memory. While these basic metrics are easy to track and report, they fail to show marketing’s contribution to the bottom line. Marketers are now under more pressure than ever to prove return on investment (ROI). And while marketers support the idea of data-driven decisions, significant gaps exist between desire and execution. The question often is not necessarily why, but how.
The 2012 BRITE-NYAMA Marketing in Transition Study revealed several common challenges marketers face in the collection of and reporting on the data necessary to effectively prove ROI within their organizations. According to the study, 51 percent of survey participants stated a lack of sharing customer data within their organizations as a barrier to effectively measuring their marketing ROI. About 65 percent of respondents said comparing the effectiveness of marketing across different digital media is a “major challenge" for their businesses.
Here are five tips to help you get started measuring your marketing efforts.
Before you can effectively measure success, you must define what your key performance metrics will be, and agree upon the definition of “success.” The definition of success is not only unique to an organization, but often to each stakeholder, as well. For example, content marketing managers will be interested in the number of blog posts and downloads published, while your CMO will be interested in cost-per-lead and number of new leads at each phase of the sales funnel. For examples of additional digital marketing KPIs, check out John McTigue’s blog post, Top 10 Inbound Marketing KPIs – The View From the Top.
Once your KPIs are defined and agreed upon, the next step is to establish appropriate metrics. This may be a bit tricky, especially when you are first starting out. Chances are good you will need to make adjustments to your goals as you dig deeper into the data over time. Whether your goals were too aggressive or too conservative, be willing to adjust accordingly. At this point, you may also consider establishing guidelines for how the data will be presented. As a general rule, keep things simple. At a quick glance your C-level executives should be able to tell if the goal was met or not. If using a spreadsheet, consider a simple color coding system—perhaps green if the goal was met and red if it was missed.
As previously mentioned, one of the primary concerns of marketers who participated in the study was the lack of sharing customer data within their organizations. If you are like most organizations and data is collected and managed in multiple databases, establish a system for collecting the data needed from each department. First and foremost, work with your sales and IT departments to create a closed-loop process through your marketing automation platform. This integration will provide you with timely feedback from sales on the impact of your various activities in driving revenue.
Don’t wait until the end of the month to evaluate your performance. Rather, monitor your KPIs on a weekly, if not daily, basis. For example, at Kuno, if we notice our number of new leads is below target at any point during the month, we have a plan in place to publish and promote new content among other tactics.
The days of “this just feels right” are long gone and collecting simple data just doesn’t cut it. Successful marketers understand the importance of using data to make decisions and justify budget requests to their bosses.
Do you have more steps for measuring marketing ROI? Please share your tips for showing marketing success in the comments section below!
Photo Credit: SalFalko