Marketing ROI: what business metrics should you measure?

Marketing ROI what business metrics should you measure

If you’re marketing your brand and feel you’re having some success with it, but aren’t exactly sure how much, it’s probably time to think more clearly about KPIs. If your previous tactic was to log into your Analytics, click around a few times, then choke back the overwhelming sense of panic and shut it down again… don’t worry. This time it’s going to be different.

The first thing I want you to do doesn’t involve numbers at all. I want you to take a few minutes to think about why you’re in business. Now think about what you’re trying to achieve. What are your goals? Pick two or three main goals for your business, things that can be quantified.

The process of picking the key metrics to measure is easy when you know what your goals are. All you have to do is look at the bigger picture and then work your way backwards from your goals to your KPIs to your metrics.

Marketing goals, tactics, metrics and KPIs

If you’re not sure whether you’re working out goals or metrics or something else entirely, the way it works is:

  • You decide on a goal
  • You use tactics to achieve your goal
  • Each goal has one or more KPIs
  • You use metrics to measure those KPIs

You want to choose goals that are measurable. Brand recognition, for instance, isn’t easy to measure. You should also understand WHY something is a KPI, and how that relates back to the business. Instead of saying that you want to rank better for a certain keyword, you need to know WHY you’re trying to rank for that keyword.

If you’re in business, you probably have the following preoccupations:

  • How much money have we made?
  • How much money have we spent?
  • How much profit have we made?

These are the important questions, so base your goals on what will drive business growth.

The limitations of data

Analytics are getting better every day. There’s a lot of data floating around out there – Google Analytics is a seemingly endless font of numbers, while native analytics on platforms such as Twitter can offer interesting insights into your audience. But it’s important to be aware of the limitations of this data and be careful not to draw conclusions erroneously.

Here’s an example. Your Analytics tell you a story about someone purchasing from your website yesterday at 9 pm. It says they arrived at the homepage, put a product in their cart, and promptly paid for it. You’re likely to draw certain conclusions from that quick, easy transaction. What you may not know is that this person has actually visited your website three times over a period of time. The first time, she was at work and chanced upon your site from Facebook, took a look around and made a mental note to come back. She did come back, but only two months later, when she was on a long bus ride and spent a good while on her phone looking at lots of products. The third time (the time she ‘converted’) was from her home computer and she knew from the previous visit what she wanted so went straight to it.

There isn’t currently a foolproof way of knowing that such a journey has taken place, so the data you’re seeing about that conversion is only half the story. If someone has used multiple devices to visit you, this won’t be flagged in your analytics. You’ll need to tap other insights to better understand user journeys.

Remember at all times that it’s not about sessions, but about people. People are messy, so is their data.

Giving yourself too much data

The most important rule of marketing reporting is to not report on everything. Just because you can add a hundred widgets to a data dashboard doesn’t mean you should. A sea of numbers isn’t going to help you see important information.

When setting your goals, look at your most profitable products or the ones that give you the best margin or have the cheapest acquisition cost, and relate it back to that. It’s not about whether you’re second or third on Google search engine results pages (SERPs) or that a particular keyword has a high volume of search.

As I say all the time, context is everything. Learn to prioritise what you spend time on and don’t waste resources on tactics unless you know WHY you’re doing it. Do you get a huge amount of traffic from social? That’s great. But, do you know what those users do when they get to your site? Do they bounce after 5 seconds? If so, they aren’t as valuable as they might seem.

Some ideas for metrics to look at

Here are a few examples of what you might consider tracking to better understand the ROI you’re getting from your marketing.

Your website metrics

Don’t get hung up on how many people visited your website, if you have 20,000 visitors and not a single euro earned from that traffic, it’s a completely meaningless KPI. Instead, reframe the question and ask yourself what that traffic can tell you about other KPIs.

The second thing to understand is that sudden dips or spikes, while they may be interesting, don’t really tell you anything about your overall performance. It’s much more interesting to measure long-term growth (or otherwise).

Don’t measure: Website visits last month

Do measure: Whether visits are growing over time, whether last month was better than the same month the year before

Don’t measure: Bounce rate (unless it’s insanely high)

Do measure: Time spent on your site

Search engine ranking

Yes, we all want to rank well on search, but this isn’t an end in itself. Trying to rank for every term in your industry is a massive undertaking and may not result in increased business. For instance, if 80% of your business comes from a particular service you offer, there’s not much point spending a small fortune on ranking for a different term that only brings you a fraction of the business. It’s all about what your positioning is and where the profitability lies.

Don’t measure: all ranking across your spreadsheet of 2,000 keywords

Do measure: your ranking for what brings you the most amount of business

Analysing conversion rates

Ah yes, the sugar-coated lollipop of marketing: Conversion Rates. You need to know your conversion rate. If you do any kind of marketing – be that your own time or agency fees – and you don’t know what your conversion rate is, then you are wasting everybody’s time. In fact, stop everything you’re doing until you’ve fixed this one thing.

Conversion is a big area, because there are a variety of ways you may be getting conversions and each type of conversion will be worth something different to the business. A few of the conversions you could be getting are:

  • Enquiries through your contact form
  • Phone calls
  • Purchases on your website
  • Newsletter signups
  • Gated content downloads
  • Competition entries

How you measure the success or otherwise of these conversions will depend heavily on how your sales pipeline works. A few things will have a massive effect on this, such as how many enquiries turn into sales, the cost of acquiring these leads, and the overall value of the sale itself.

Don’t measure: your conversion rate as one global number

Do measure: the rate for each type of conversion, set against the cost of generating each conversion per channel

Don’t measure: just conversion rates

Do measure: the conversions that result in business

This last one is important, because it’s part of the key to defining your marketing budget: the Cost Per Acquisition. I’ve written a blog about how to calculate this, which will help you establish a CPA if you’ve never done anything like it before.

As far as we’re concerned, Cost Per Acquisition is a cornerstone metric, as it directly impacts on your profitability. There are lots of ways to improve this number, from optimising your marketing tactics to reducing churn. Take a hard look at the journey a prospect takes from the moment they become aware of your brand to after they have been the happy recipient of your service, because you can probably do better at each stage. For example, how quickly do you reply to enquiries and, if requested, send a quote? If your competition is doing it within the hour, but it takes you three days, there’s a good chance you’ve lost the lead. That’s Cost Per Lead (CPL) spend down the toilet.

Or imagine that someone signs up for a free trial, but no one reaches out to them to convert that trial into a subscription?

What if someone has put dozens of items in a cart, then for some reason not completed the purchase? What happened? And what did you do about it?

What marketing successes will you measure?

When it comes to data, a little goes a long way. Choose your metrics carefully – for each one, know why you’re tracking it and what results you want to see. Make sure they help you achieve your business goals.

Work out the most meaningful way to visualise each metric (pie chart, bar chart, line graph, etc.) and set yourself up a data dashboard (there are lots of great data visualisation websites out there, here at Engage Content we use Klipfolio). Don’t forget to log in once a week to review your progress; but remember that short-term dips and spikes aren’t the whole picture, so keep an eye on how you’re doing longer-term. Good luck!

Need help with your marketing strategy or getting to grips with ROI? Get in contact with us today and we’ll see how we can help.