The first quarter is coming to a close, so it’s time to begin evaluating your marketing performance to determine what areas have been most successful and which should be budgeted for in the upcoming year.
Proving the return on investment (ROI) of a particular marketing initiative can be challenging, especially since, most often, more than one variable is responsible for influencing a sale. Further, some aspects of your marketing initiatives may not impact sales or profits this year; rather, they may strengthen brand equity and customer relationships in the long-term.
Given this, setting a marketing budget is no easy feat. But, establishing a solid foundation of tracking and measuring data can be instrumental in taking out the guesswork and placing your designated dollars on the right tactics that will drive real, measurable results. Implementing the following best practices can help make this a reality.
Tag all marketing initiatives
In order to effectively see what tactics are driving behavior, its important to have a tracker, such as a separate landing page, on each piece of marketing collateral or ad. This goes for email campaigns, social media campaigns, printed flyers, etc. Each tactic should have its own unique tracker so it can more easily be measured.
Related: 3 Simple Steps to Measure the ROI of Facebook Ads
Set goals, objectives and events, then create automatic reports
Set goals, objectives and events in your Google Analytics or Customer Relationship Management (CRM) platform to evaluate conversions and customer data. Failure to do so will significantly limit what you will be able to track, or lead to countless hours wasted, sifting through data.
Outside of your main goals and objectives, you should be tracking micro conversions. These metrics show you what site visitors were doing before completing your end goal, and therefore allows you to use the full potential of the available behavioral data.
Commonly measured micro conversions are: read RSS feed, subscribe to newsletter, create an account, download eBook and set up a consultation, as well as each step in the sales funnel. Micro conversions can be added to Google Analytics as an event, or by measuring each individual step in the sales process as a goal and creating a conversion funnel.
The beauty of Google Analytics and leading CRM platforms is that they can do all the data crunching for you by setting-up automatic reports. This allows your time to be focused on interpreting trends or key insights and making your next move, rather than pulling and organizing information.
Know the first touch point, last touch and influencing touches
With myriad touch points and interactions with customers that can influence or drive a sale, you need to look at the customer’s first touch point, influencing touches and the last touch to gain a holistic view of your marketing traction. Breaking it down will help you more accurately see what elements of your marketing campaign are driving more customers to make a purchase.
- The first touch point: Regardless if the website visitor achieves the end goal, the first touch is all about tracking what touch points led the visitor to your website for the very first time.
- The last touch: This measures the final touch point before a customer makes a purchase or moves forward on your specific end goal. If you’re focused on driving conversions, this is an important metric to know.
- Influencing touches: While the first touch tells you how they got to your website and the final touch shows what drove the conversion, both largely ignore all other factors that may have influenced a customer’s journey. Use Google Analytics to determine the following touches that influence the middle of the buyer’s journey:
- Last Non-Direct Click: Ignores direct clicks and monitors the channel that a customer previously used
- Last AdWords Click: Identifies the AdWords ads that closed the most conversions
To the above point on setting automatic reports, each of the above touch points can be automatically pulled for you in Google Analytics. You can also use the “Model Comparison” tool within the platform to compare the different touch points side by side.
Connect social media metrics to real business outcomes
Social media can influence a purchase behavior, but it likely was not the “last touch” that closed the purchase. Rather than simply looking at traffic, shares or reach, move beyond the vanity metrics and consider how your social data might impact sales by connecting them to business goals. This will help demonstrate how social marketing dollars are helping move customers along the decision journey, even if they are not currently making purchases. For example:
- Traffic can be connected to revenue or lead generation, establishing autonomy and conversions
- Follower growth can be connected to brand loyalty, brand awareness and customer growth
- Engagement can be connected to brand loyalty, brand awareness and audience growth
- Reach or impressions can be connected to brand awareness, establishing authority and audience growth
- Conversions can be connected to revenue, lead generation and customer growth
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Pay attention to the quality of your leads
Knowing the lifetime value (LTV) of your customers will give you a more accurate picture of which campaigns are resulting in the best ROI. This metric is the net dollar amount a customer contributes over their life as a customer.
It is important to pay attention to the LTV of your customers because some campaigns may seem the most fruitful at first glance, but after pulling the LTV, you might find that it actually generates the lowest ROI. Without this extra step, you could be pouring your marketing dollars into the wrong channels.
Further, only focusing on a single conversion as the end goal ignores all other actions that lead customers further down the sales funnel. Monitoring their actions or behaviors and sales over an extended time period may open the door to new opportunities, such as a referral or loyalty program.
In Google Analytics, the LTV report can be found under the “Audience” tab and then “Lifetime Value.”
Marketing is an investment. Without investing time and energy into properly tracking and measuring your customer data, the value of your marketing investment will significantly weaken. Know what you’re tracking, consistently measure its performance throughout the year and take action, when needed. Further, continuously conduct different tests to see how little changes might influence sales or behaviors. Doing all this will eliminate the guesswork and put your marketing dollars into the right channels that will get customers into the sales funnel and move them along the journey.
