We have talked before about the importance of marketing including making sure you have a marketing strategy and a budget. But in the current economic climate businesses are looking to make savings wherever they can and you might be questioning the value of marketing.

​This month we thought we’d take a look at how you can measure whether your marketing is giving you a good ROI (Return On Investment) by comparing how much you are spending on marketing with the revenue created.

How to measure marketing ROI
There is a simple formula you can use to measure marketing ROI but first you need to gather certain metrics:

• Number of leads: How many people converted to a lead?
• Lead-to-customer rate: From those leads what percentage converted into customers? Eg if 10 leads out of 100 converted into customers that gives you a lead to customer rate of 10%
• What is the average price of your product?
• How much did your marketing campaign cost? Include costs of the ads including staff costs of those who worked on the campaign.

Customer Lifetime Value (CLV)
CLV is another useful measure of ROI – a simple formula for calculating your CLV is:
CLV = (Average value of a transaction) x (Average number of transactions) x (Customer lifespan)

CLV is a great marketing analytic because it tells you how much a customer is likely to spend with you and gives you insights that will help you plan your marketing strategies.

But ROI isn’t just about financial measurements, you can also get a good indication of ROI from other sources:

• Increased brand awareness – A big marketing push is common among startups to increase brand awareness and carve a space in the market.
• New social media followers – While increased numbers alone doesn’t necessarily mean positive ROI, if the new followers are your target audience and are engaging with your content then they are more likely to become customers.
• Email newsletter signups – Email marketing is a valuable way of reaching both new and existing customers. Use email marketing to send personalised offers, deals and new products and services. Tracking sales attributed to email subscribers can help you decide whether to invest more or less time in your email marketing.

How you can Improve your ROI

• Set Clear SMART Goals: Be specific about what you want to achieve and set a deadline (and stick to it)
• Track your metrics: Google Analytics is great for keeping you up to date with important metrics such as sales, website traffic etc.
• Analyse the right metrics: There’s no point focussing on metrics that don’t help you achieve your goal. Wanting to increase revenue? Focus on conversion rates and CLV. Looking to increase brand awareness? Direct traffic and social media mentions will give you good insights.

Is your business marketing in need of a boost? Creative Remedy can help improve your ROI with a bespoke prescription for your business. Get in touch to find out more.

The information you get will give you indications of how you can improve your website to increase visitor rate and sales such as redesigning your homepage to make it more user friendly or ensuring it’s mobile friendly if it appears most of your visitors are using a mobile device.
 
How does it help with each marketing channel?
The information you get from your website analytics data will give you great insight into where your visitors are coming from such as an organic search using a search engine, paid search (Google Ads etc), referral from blogs, social media or email. You’ll be able to see the biggest drivers of website traffic and it will also tell you which channels you need to focus on to see improved traffic flow.
 
In order to get a real understanding of the numbers you need to look at each marketing channel's analytics as well as your website analytics. Understanding how well a certain email campaign has performed compared with a blog or social media post can help you see where you need to focus your attention.
 
How can you find out this information?

• Google Analytics With this fantastic free tool you’ll find valuable information about all your website traffic and find out how your marketing channels are performing.
• Website reports
• Social media insights - most social media apps have their own free analytics so you can see how well they’re performing where you can make improvements.
• Email marketing insights - use this data to help you produce effective email campaigns. Insights will tell you what your readers are interested in so you know what to focus on in the next campaign.
• Collect your own data - trade shows, events and networking are fantastic opportunities to find out more about your customers and what they’re really interested in.

 
It’s really important that you use all the analytics tools available and measure everything you do. Focus on one marketing channel at a time, really get to understand it and build on this. Make it manageable for you and your business - if you find it tricky to get your head around or you lack the time and patience, get support from your web designer.
 
Understanding your numbers
If 100 people visit your website how many of those turn into a call, enquiry or an order? If you’re finding the number of conversions is dropping it’s worth reassessing your website. Perhaps your homepage isn’t clear - is it obvious what your products or services are? Or maybe your Contact Us form asks for too much information. If a customer is taking those first steps you don’t want to scare them off with lots of questions. Fundamentally you need to understand your customers so that all your marketing and content is relatable and relevant to your potential customers.
 
Contact Creative Remedy for further advice or to take advantage of a Free Website Audit