How to Measure ROI: An Overview
Do you ever wonder: how can I tell if my marketing is working? Developing an effective strategy to measure ROI seems dry but is worthwhile. To get to the bottom of your results and dissect the success or failures of all your omni-channel marketing, keep it simple.
Keep Your Metrics Simple
The image below overlays a traditional marketing funnel with a various omni-channel marketing distribution methodology. These endless statistics are a joy to marketing executives who analyze and review and tweak, but they’re not necessarily for a marketer at a small business looking for simple tracking. What you need are top-level metrics to analyze on a regular basis to avoid overcomplicating your tracking.
The trick is to choose the top-level metrics most revealing for your firm’s marketing efforts. Begin by answering a simple question: How do you define success? To measure ROI, we must define success and acknowledge that it can exist at any part of the pictured funnel. Success for you could be more new customers or it could be more referrals from existing customers. Perhaps it’s something very specific like five new clients in a particular client segmentation within a defined time period at a certain average contract value. If you can define this reasonably and metrically, and consider your historical success rates as well, then you can set benchmarks for your future success.
After defining success, measure it by choosing the three most meaningful metrics for you. Unless you’re a true marketing wonk, the countless possible metrics of success will distract you from your end goal. We typically find the best metrics for a business measuring marketing success are:
- Frequency of new lead flow
- Conversion ratio from prospects to clients
- Average value of a new client
For any marketing tool or strategy, define your metrics of success and compare it to your benchmarks. Any basic tool will show email open rates, click through rates and engagement rates, but these metrics aren’t necessarily valuable to your bottom line.