Cracking the code to successful marketing is no easy feat. Even if you’ve mastered the tasks of shaping an engaging social media strategy, crafting high quality marketing campaigns, bolstering brand awareness, optimizing conversion rates, and more, you’re still not done yet. While all of those things take a great amount of time, detail, and well-thought out execution, they only make up half of the equation.
So what makes up the other half? Determining the effectiveness of it all! Marketing effectiveness is the practice of tracking and monitoring metrics and key performance indicators (KPIs) to make your business aware of how each marketing effort is performing.
Essentially, measuring marketing effectiveness helps you understand which aspects of your marketing strategy to allocate more of your time and money towards in order to optimize your results. Not only that, but looking at your marketing data can show which of your strategies to adapt and implement necessary changes in order to further drive sales and qualified leads.
For example, if your marketing data shows that your social media channels consistently bring in 500+ visitors to your site versus your paid ads which only bring in 5-10, you’ll know to direct more of your marketing spend towards social media, since it is the more effective marketing effort.
Or if you see that a certain number of your Instagram posts attract far less engagement than others, you can alter your copy, posting time, image content, or other aspects to boost your engagement rates.
Measuring marketing effectiveness enables marketers and businesses to focus on the most important channels and reap the benefits, including saving unnecessary marketing costs, expanding revenue streams, and attracting new customers or qualified leads.
However, because every marketing campaign and channel is different in how its success can be measured, you shouldn’t assume the same viewpoint for all your marketing efforts. While there is no set formula for how to measure your marketing effectiveness, here are some foundational measurements you can apply:
1) Set your goals. What are you looking to achieve with your marketing efforts? Establishing your goals is the best place to start to give specific purpose and direction to each of your marketing tools. This is also a great time to decide how you will determine success for each of your marketing efforts.
2) Choose what you’ll put in your toolbelt. What marketing tools will you implement to reach the goals you set? Thankfully, there are many channels to choose from, and they all have different functions. Some marketing tools worth thinking about implementing include:
- Social Media Marketing – Most social media platforms provide free analytics, which makes it easy for you to get insights on customer data, content analysis, and see which channels are driving the most leads and conversions.
- Email Marketing/Newsletters – Email marketing is where you can send promotional information, brand messaging, and send exclusive content to help cultivate loyalty and hopefully drive conversions.
- SEO/Content Marketing – Shaping your SEO and content marketing strategy is what gets your content ranked on google search engines and appears to potential leads!
- PPC/Paid Advertising – Using pay-per-click advertisements is a faster alternative to the slow building process of SEO strategy.
3) Measure your ROI. A big marker of successful marketing is the return on investment that you receive as a result. You can track your ROI by looking at key performance indicators, or KPIs. Some important KPIs include:
- Monthly website traffic
- Keyword performance and search engine results
- Customer lifetime value – (Average annual profit contribution per customer multiplied by the number of years they remain a customer)
- Conversion rate – (Number of conversions/interactions with sources that are tied to a conversion)
- Average conversion time – (Average transaction time/Conversions)
- Customer retention rate – ((Customers at end of period – Customers acquired during period) x Customers at start of period) x 100
Google Analytics is a great tool that can help you look at these numbers to determine if you’re reaching your goals.
4) Observe how your audience responds to your content. Recognize the behavioral actions of your customers, and what certain content could be encouraging them to do or withhold from. This can help you shape your marketing strategy beyond the numbers and allow it to be in tune with the emotional needs of your leads.
5) Make those sales! While sales shouldn’t be the one and only metric you focus on, it is one of the most important metrics to monitor when determining the success of your marketing strategies and campaigns. Driving sales is the ultimate goal of a marketing campaign. Once you’ve made the sale, you can focus on further nurturing those converted leads to turn them into happy and loyal customers.
There’s so much more to measuring marketing effectiveness than the number of conversions, sales, or leads generated. Marketing effectiveness is determined by a myriad of factors that are all part of the intricate and ongoing process that is marketing!