3 Ways To Measure Marketing Success
Today’s marketers know they must continue to evolve how they measure, analyze, and communicate the success of their campaigns. It’s no longer enough to review post-campaign reports and pontificate over what could have been done better – now, marketers need to measure and analyze campaigns in a more methodical manner.However, there is one problem. According to Forrester, less than a third of marketers are able to meet all the standards of a mature marketing measurement practice. In the world of data science, there’s a common saying: “Garbage in, garbage out.” In other words, if your data and analytical capabilities aren’t up to snuff, your insights are going to be weak.
The prognosis is clear – marketers need to make more progress on their data-driven initiatives, or risk losing opportunities to connect with their target audience. One way to make significant progress is to make sure you’re selecting high-value, people-oriented metrics and then support those metrics with high-quality data. Let’s take a closer look at how your business can select and support the right marketing metrics.
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Defining Marketing Success
Before you begin selecting impactful metrics and collecting supporting data, it’s crucial to determine what success looks like. Is it to build brand equity, or create sales in the short-term? Are there certain revenue goals that must be met? Something as simple as “improve the bottom line” can be so vague that it leads teams astray – so spend some time thinking about this.
Once you have an idea of what success will look like, check in with leadership and ensure your priorities are aligned. Once you’ve verified that your organization is on the same page, you’re ready to go forth.
Measure Marketing Success from the Consumer’s Perspective
Customers should be at the center of your business strategy – and marketing teams especially need to ensure they’re keeping a consistent pulse on potential customers. Taking a customer-first approach will help you understand how the market perceives both your brand and your product. Many marketers are beginning to realize this, with 84 percent of marketers agreeing that customer expectations will make person-level data a critical capability before 2023.
This is especially important as modern consumers continue to interact with campaigns across channels. For instance, imagine an automotive marketing team found that pay-per-click (PPC) ads on Google are driving a stunning number of leads to local dealerships.
Before investing more money into the campaign, they should take a step back and look at which touchpoints make up the typical customer journey. Chances are, PPC ads are the final touchpoint in their sales funnel and consumers are engaging across multiple touchpoints among a myriad of channels before demonstrating any intent to buy. If they did not properly track brand metrics, they may not be able to understand how brand-related touchpoints influence sales.
It’s important to understand how each of these touchpoints work together from the customer’s perspective in order to choose the right metrics. Otherwise, you’ll miss out on crucial nurture activities.
Choose Important Metrics that Measure Marketing Impact
It’s never been easy to measure the impact of marketing, and the difficulty of this task is growing due to the ever-expanding number of marketing channels mixed with a spotlight on consumer data privacy. So, how should campaign impact be measured?
First, marketers must avoid focusing on feel-good vanity metrics. Reporting that “web traffic increased by 20 percent” or “we gained 100 new followers” may sound like indications of success, but they are difficult to tie to sales and brand performance – especially across multiple campaigns. It’s important to start with consumer-centric metrics first, with performance metrics playing a supporting role. Consider the following metrics as a starting point:
- Repeat purchase rate – This customer-centric metric will provide indications into how loyal your customers are and can also be used to forecast sales.
- Customer lifetime value – Over the course of their relationship with your brand, each customer will contribute a different amount to your bottom line. This metric estimates how much they will spend in the coming years.
- Churn rate – This metric will provide more information about when people leave your sales funnel and why. It will also provide insight into which campaigns are causing or reducing customer churn.
- Funnel velocity – How quickly are your customers moving through the sales funnel? An increase in funnel velocity means you don’t need as many touchpoints to turn a prospect into a sale.
- Sales growth – Sales growth examines the trajectory your sales are trending in, helping you estimate how much ROI a campaign will net.
- ROMI – When you divide your total revenue by your total marketing investment, you’ll find your return on marketing investment – also known as ROMI. This can be used to gauge the success of campaigns, or as a foundation for scaling a successful campaign.
Once you’ve determined which metrics you’d like to measure, contextualize them into marketing KPIs, also known as key performance indicators. Keep in mind that KPIs must be measurable, time-bound, and tied to an existing campaign.
Solicit Data from Outside of Marketing
Marketing doesn’t exist in a vacuum – almost every department in your organization is constantly using and producing valuable data. Likewise, your brand likely has partnerships with certain brands or agencies, providing another incredible avenue for data collection. Savvy analysts know that cross-organizational or cross-departmental partnerships can provide a whole new layer to measuring campaign success.
For instance, think of an automotive manufacturer that’s generating a large volume of leads for their dealerships after advertising a special offer for trade-ins. For their marketing team, this may seem like great news. But leads don’t drive revenue on their own – so, the marketing team must ask for access to both qualitative and quantitative data from the dealerships’ sales teams. You may find that very few of the leads are actually converting when compared to previous campaigns, an unfortunate indication that the campaign wasn’t as successful as it seemed.
After realizing their campaign fell short, the marketers could then turn to an information partner to contextualize the results of the campaign and gather more data for future campaigns. For instance, they could partner with a financial institution to find if consumer spending on automobiles is down long-term or learn which interest rates customers would be most likely to accept during the negotiation process. This additional data could be all the marketing team needs to uncover new metrics and turn a misguided campaign into a decisive victory.
If you’re looking to analyze your marketing impact, it’s crucial to think outside the box when determining which metrics matter and which datasets can support those metrics. However, this is often easier said than done. Research has found that 70 percent of marketers want to expand their existing data capabilities, but 72 percent are struggling to find the tools necessary to create a cohesive approach to marketing.
Before they can look at data, metrics, and KPIs holistically, marketers need a performance measurement solution that can combine and analyze all of this information into a single place. The solution must be adaptive - in a world where change is the only constant and a cookieless future seems all but inevitable, teams need to be ready to adapt their measurement strategies at a moment’s notice.
Once they have the technology, knowledge, and drive required to select the most impactful metrics, marketers will find it much easier to connect with their customers and enhance ROI.