How do you determine if your marketing efforts are paying off?
When you send out a marketing campaign, whether through a single channel like print or multichannel with email and mobile, how do you define success? Let’s look at five of the most common ways to determine whether your efforts are working.
One of the top-line ways to measure success is response rate. How many phone calls, clicks, or logins did the campaign generate? How many people responded to the piece by taking some kind of action? If your marketing goal is brand awareness, response rate is a helpful measure.
Just because someone makes a phone call or clicks through a link doesn’t mean they will do what you want them to do, such as sign up for an event or make a purchase. If you want to measure the effectiveness of your message, conversion rate is a more helpful measure of success.|
3. DOLLARS PER SALE
If you have a high volume of sales but aren’t generating enough revenue, maybe it’s dollars per sale you want to track. If it is costing you $10 to acquire each paying customer and your order sizes are only $10 each, it doesn’t matter how many people respond to the campaign. You still aren’t making money.
4. CUSTOMER RETENTION
For many companies, profitability doesn’t come in a single sale. It comes in paid subscriptions, repeat sales, or other forms of recurring revenue. Athletic clubs and automotive clubs are good examples. It might be expensive to convert a customer the first time, but over time, each customer will generate revenue month after month. Here, “success” is dependent on your ability to retain the customers you’ve gained.
Maybe there is pressure on the marketing budget and you need to determine which channels and campaigns are most profitable. For this, knowing order sizes and revenue generated is important, but to assess your overall profitability, you need to understand the total cost structure of your efforts. That means calculating ROI.
Which form of measurement is right for you? It depends on what you are trying to accomplish. Are you trying to increase brand awareness? Increase basket sizes? Ensure customer retention? Before you can measure for success, you need to clearly define your goals. Then you can align your measurement tools with those goals
to get the insight you need.