To trust your marketing, you need to measure it.
Business owners need to measure their marketing. We’ve all heard it, but many businesses don’t do it. Why? Because business owners almost always hire marketing contractors to implement their strategies. Unfortunately, not even all marketing contractors can afford to measure results completely. OpGo specializes entirely in measuring marketing—we invest in the metrics and analytic tools to give our clients custom insight into their investments. But, for those who want to do it themselves, we’ve compiled our most important metrics here.
Plan a Detailed Marketing Budget
Review the margins on your products and services. Most companies have multiple, so you’ll likely have several corresponding campaigns. Efficient marketing tailors each campaign to its persona with laser focus. Share the uvp on the product in your campaign. Sure, it might sound easier to spend all the budget on one mega-campaign, but customers rarely offer more than a glance at an ad. If they don’t find something relevant, they’ll move on. If you are banking on ROI, spend the extra effort and cost it takes to build a laser-focused campaign.
Analyze Customer Lifetime Value
Analyze your customer list and segment it by purchase behavior. How many customers buy one time and how many buy multiple times? And how long do they stick around? Hindsight is 20/20 so use it to set goals for the future.
Product Margins and Cost Per Campaign
Your marketing team will have more than one idea to market each of your products and services. The concepts they share will require different marketing mediums and costs. Decide what you can afford at this time based on the sales or lead goal for the campaign.
Here are a few examples of mediums that could be included in each campaign:
- Campaign Example #1: Video, landing page, and retargeting.
- Campaign Example #2: Direct mail, landing page, sales team follow-up.
- Campaign Example #3: Programmatic banner ads to a look-alike audience, shopping site, emails to cart abandoners.
Marketing Mix & Channel Specific ROI
- Marketing Mix ROI – Calculate the overall ROI for the year on the marketing mix.
- Channel Specific ROI – Calculate the ROI for each channel. This is easy to do with digital channels. If you are using traditional media like broadcast and print, at least calculate the cost-per-thousand (CPM) and compare it to the digital channels used in the campaign. Typically, the traditional media channels are used to generate awareness and add lift to the campaign. (Testing campaigns with and without these lift channels can provide more insight.)
CAC, CPL, & Close Rate
Analyze the prior year’s marketing investment and calculate the cost-to-acquire a customer, cost-per-lead, and the close rate. This is a starting point when setting goals, aka benchmark.
- Cost to Acquire a Customer (CAC) – How much did you spend last year and how many customers did you acquire? This is the easiest way to calculate your cost to acquire new customers. Even if the prior year wasn’t an ideal year, do the math. If you know the lifetime value of your customers, you can use that info in combination with your margin to assess whether or not your CAC is too high.
- Cost per Lead (CPL) – Calculating the cost-per-lead is very straight forward. What did you spend and how many leads did you get? (Also, assess the quality of the leads—bad leads should not be counted!)
- Close Rate – If you are B2B, you’ll be monitoring your close rate. (How many leads became customers?)
- Customer Lifetime Value (LTV) – The customer lifetime varies among businesses. How long do your customers remain loyal to you? How many times do they purchase and what is the average order value? Once you know this information, you can decide how much you are willing to invest in a new customer.
What’s most interesting about channel optimization is the buzzwords flying around with clicks and impressions. Impressions and clicks are components of calculations—they are simple aggregations that feed calculations like click-through-rate (CTR) and cost-per-conversion. You will use them to optimize digital campaigns, but clicks and impressions are worthless unless you tie them to benchmarks for leads and/or sales.
- Cost-per-click (CPC)
- Click-through-rate (CTR)
- Conversion Rate