This is, and always will be one of the hottest topics in marketing. For all of my clients, measuring ROI is equally important whether they’re using the Yellow Pages or Yelp mobile. So how do you measure your marketing ROI and what do you measure?
That’s a tough question. The short answer is that it depends. It depends on your goals, your product life cycle, your message & offer, the depth and breadth of your advertising campaign, your measurment tools, your commitment to the process and identifying the consumer touch points.
I do believe that the worst way to measure a campaign is a “how you heard about us” survey? This is a test and most people will fail because they don’t know how they heard about you. By design, most advertising is an interruption, and most consumers won’t remember when or on what medium your ad interrupted them.
So choosing what to measure relates to a number of different factors. This is by no means a complete list, but it’s a good start.
- Product Life Cycle – Do some research to identify the number of consumers who are buying your product today. Compare that to the number of people who will buy this month and this year.
- Message & Offer – if you give away a Ferrari, you should have a lot of immediate response. If you’re offer to purchase the Ferrari is just the same as every other competitor ie. come see us, payments as low as $6000 per month at 0% down OAC, then you’re message will be lost in the advertising noise. What is it that makes you unique compared to the other Ferrari dealers? you really need to let people know about that because that’s why they’ll buy from you.
- Breadth & depth of campaign – the more senses you appeal to in your campaign the more succesful it will be. Its also true that if your campaign is only 1 week, then your message will only appeal to those who are shopping for your product or service right now. Since these types of event campaigns only reach a small fraction of the total market, you’re expecations should be in line with the number of consumers shopping right now.
- Measurement tools – here’s the meat and potatoes. Traditionally, the first tool people use for measurement is sales. Mainly, I think, because it’s the easiest. Here’s some others to consider…
- website hits,
- specific product requests,
- conversion ratio of leads:sales,
- identify the webpages most visited,
- consumer feedback, complaints or reviews in store/person/online,
- staff feedback in store/person/online,
- social media friends,
- social media platforms your on,
- the average a. age of consumer b. average sale price c. quote change over time ie. now vs. 1 year from now,
- your google ranking,
- your market share,
- number of new customers or repeat customers
- Commitment – to measure ROI effectively, you need to use the tools that are inline with your overall marketing strategy, commit to monitor those tools over time and perform a proper analysis at the end of your campaign.
- Touch Points – form a small brainstorm group of your staff from each department. In this meeting, brainstorm all the different ways that your business can connect with a new or existing customer. the obvious ones are your front line sales staff, but what about your accounting, service, client care…in person…online…traditional media…social media etc
In summary, my formula for measuring ROI is this….
- set a goal.
- create a multiplatform marketing plan to achieve that goal.
- identify all the touch points at your disposal to connect with consumers.
- choose 5 or 6 measurement tools that allow you to confirm whether or not you reached your goal.
- Track these tools over time.
- analyse the data.
- make adjustments to your new plan based on previous results.