You’re the owner of a marketing firm that creates ad campaigns for various clients. Over time, you notice that your sales campaigns have generated fewer leads. Your clients aren’t happy.
You realize that you must update your marketing techniques for all campaigns. You intend to start a comprehensive investigation to measure marketing effectiveness. But you don’t know where to begin.
What does measuring marketing effectiveness entail?
Knowing how to measure marketing performance requires a full review of your return on investment (ROI), which means that your marketing investments must translate into profits and gains. You must also track every aspect of your marketing campaign thoroughly to monitor lead traffic and highlight weak areas.
This article will show you effective ways to measure marketing success. Let’s explore.
Return on Investment
Assessing your ROI is the best way to determine marketing effectiveness because it helps you determine if your investments are helping you meet your profit goals.
A higher ROI means that your marketing gains are higher than your marketing costs. Moreover, it helps you determine the lead quality that your investments produce.
- Example: If you spend $2,000 on a marketing campaign that produced sales amounting to $7,000, your ROI is $5,000. This also means that your ROI skyrocketed 500%.
A low ROI gives you enough time to adjust your marketing strategy to produce quality leads. Also, it will help you justify your current expenses, in addition to tweaking your budget if necessary.
An in-depth review of your investment habits also allows you to gauge your campaigns against competitors. ROI can also help you decide where to concentrate where your investment energies, helping you bolster weak areas in the process.
SWOT stands for strengths, weaknesses, opportunities, and threats. SWOT may consist of a brainstorming session where you find ways to separate yourself from competitors. It will also make your campaign more unique, and you can determine how you can expand your strengths.
Overall, SWOT covers two key areas:
- Internal Resources: Knowing the strengths of weaknesses of your marketing goals
- External Resources: Finding opportunities where they arise and highlighting the competition that may threaten your campaign
If you’re searching for opportunities, look at your marketing content. Ask yourself various questions, such as:
- What am I not publishing?
- What are some trends that I’m not taking advantage of?
- What are my competitors failing to do?
SWOT will also help you get more results while doing less. You may learn about certain activities that drain your time and energy throughout the day.
You may also have high sales, but your profit margins haven’t changed. An extensive analysis could help you find hidden factors that hinder your success.
You may be elated by your sales numbers, but the underlying costs of each sale can eat into your profit margins. Determining your cost for each sale enlightens you on your long-term profits. Moreover, it helps you improve your marketing machine and produce the steady lead flow of your preference.
- Example: If you landed ten sales on a $2,000 budget, you spent $200 for each sale. Overall, divide your budget by the number of sales you made to know the cost you incurred for individual sales.
For a cost per acquisition (CPA) on new customers, an ideal figure depends on your business operations and marketing goals. Consider the following factors when assessing a CPA:
- Budget Scale: Look at your budget to know the amount of money you’re putting into marketing. If you have a low acquisition number, consider adjusting your budget accordingly.
- Business Profile: Your business profile is the risk profile of your company. Are you in a high-growth phase where you can devote some of your profits to additional exposure?
- Advertising Platform: Your chosen marketing platform may yield fewer short-term conversions but long-term gains overall. Affiliate marketing and PPC require different budget goals and priorities.
Regardless of your acquisition drives, knowing an exact figure can lower excessive costs for each sale achieved. From there, you’ll have more profit that you can devote to marketing endeavors.
Cost Per Lead
When it comes to cost per lead, you’re focusing on the leads alone instead of the costs behind them. Measuring marketing effectiveness requires a thorough understanding of your lead stream. Your lead quality is subpar if you have a steady lead flow but fewer sales overall.
- Example: You have a $1,000 budget and generate ten leads. The cost per lead is $100 each. From those ten leads, you generate five sales.
While calculating the cost per lead doesn’t help you garner quality leads, it can steer you in the right direction as you attempt to nurture valuable leads.
To capture solid needs, track all aspects of your campaign, especially when dealing with website traffic. If you’re running a website, know how many unique visitors that your page receives within a certain period. Unique visitors refer to individual visitors that come to your page.
After, find the page view count, which denotes the number of times that visitors click on your content. If you have a high page count and lower unique visitors, you may have some visitors who like your content and click on your pages multiple times. To know for certain, however, look at the bounce rate.
The bounce rate refers to the number of people who visit your website and leave before clicking on content. If you have a bounce rate of 40 percent or more, consider revising your content or producing more of it.
If you’re concerned about traffic flow, enhance your content to make them more visible in search engines. You can use marketing strategy analytics to better understand your audience and augment your marketing campaign overall.
Measuring Marketing Effectiveness the Right Way
If you want to know how to measure marketing effectiveness in less time, refer to your ROI. Your ROI is a direct correlation between your campaign investments and your profits.
If your profits are meager, conduct a thorough tracking of your campaign that includes analyzing content and assessing unique pageviews. Measuring marketing effectiveness also calls for a full SWOT analysis plan that highlights flaws and pinpoints strengths.
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