Harness the power of measurement to maximise your marketing performance
Are you tracking the effectiveness of your marketing efforts? Are you utilising data to evaluate its performance and areas for improvement? With the complexity of marketing, it's easy to get overwhelmed and overlook the importance of measurement. However, as a marketing consultant, I strongly believe in the power of measurement and its role in achieving success. Here are the key reasons why measuring marketing is crucial:
1. Establish benchmarks: By measuring marketing, you can define what excellence looks like for your business and set targets to strive towards.
2. Evaluate performance: Measurement allows you to assess how well you're achieving your goals at any given moment, providing valuable insights for optimisation.
3. Monitor improvements: Tracking your progress over time enables you to identify areas of growth and make necessary adjustments to stay ahead in a dynamic marketplace.
4. Plan budgets effectively: Allocating your marketing budget requires careful consideration, and reviewing your marketing performance helps guide investment decisions. By measuring marketing, you can identify where to invest and determine the return on investment.
5. Optimise resource allocation: Knowing which marketing strategies are effective allows you to align your resources efficiently for maximum impact.
Follow these golden rules for effective marketing measurement:
1. Start with the basics
Establish a foundation for measuring marketing success by focusing on key metrics, including:
Revenue: The income generated from sales.
Cost per lead: The cost associated with generating a lead.
Customer acquisition cost (CAC): This metric compares the cost of attracting customers to the number of customers gained, helping businesses determine profitability. Calculate CAC by dividing the total cost of a campaign by the number of sales. For example, if a campaign cost £100 and generated 5 sales, the cost per sale would be £20. As a general rule, it should take one year to recoup the cost of customer acquisition, though this may vary across industries.
Customer lifetime value (LTV): LTV helps determine the value of a customer to your business, allowing you to allocate marketing budget and investments strategically. Calculate LTV by multiplying the average sale value per customer by the average number of times a customer buys per year, and then by the average number of years customers typically stay with you. As a general rule, the CAC should be three times the LTV.
2. Implement effective tracking measures
Establish tracking systems for website and social media activity to gain valuable insights into visitor behaviour. Additionally, utilise customer feedback and satisfaction surveys, including net promoter scores, to gauge audience perception. You can do this via online surveys like SurveyMonkey.
3. Break down your marketing objectives
Understand that marketing is a strategic process that involves nurturing prospects and guiding them through the sales journey. Visualise the sales funnel and align your marketing efforts accordingly using the following approach:
Awareness: Measure website traffic and social media reach to gauge audience awareness. Utilise dashboards to track various metrics and gather valuable data.
Consideration: Analyse the customer journey from visitor to customer. Identify conversion points and potential areas of improvement. Incentives, such as promotions or trials, can be useful at this stage.
Retention: Monitor customer retention rates and identify reasons for customer churn. Focus on retaining existing customers as they tend to be more valuable.
4. It's more than just reach
While reach is important, the true measure of success is conversion. Generating thousands of likes, followers, or distributing leaflets may seem impressive, but understanding how this engagement leads to sales is crucial. Hold someone accountable for capturing and analysing conversion rate data, even if you don't have a CRM system. Share this data regularly with key staff members to ensure everyone is aware of goals and responsibilities.
5. Turn data into action
The ultimate goal of measuring marketing is to gain insights and take action. Incorporate a 'key learnings' and 'action' column in your metrics to ensure that data is translated into meaningful strategies. Make this process cyclical by conducting monthly marketing review meetings, where key performance indicators are evaluated.
In conclusion, measuring marketing is a critical aspect of achieving success in today's competitive landscape. By implementing effective measurement strategies, you can optimise your marketing efforts, drive growth, and stay ahead of the game.
Discover more about marketing in our sales and marketing glossary, and how to create a marketing budget. Let me help you unleash the power of measuring marketing for your business. Get in touch for a free consultation.