The days when marketers used to invest money into ineffective and measureless advertising campaigns are long gone.
When it comes to differences between traditional and digital marketing, one of the major advantages of digital marketing is the fact that it can be tracked and analyzed quickly, with just a few good software tools. Also, you need to know which metrics are the most important indicators when evaluating your marketing effectiveness.
For example, likes, shares, and traffic can’t help you determine the exact ROI, but can provide you with some tentative estimates. On the other hand, it’s impossible to exclude these metrics, as they are very beneficial for your company and brand.
To optimize and adjust a marketing campaign, you need to establish KPIs (Key Performance Indicators) and measure them in order to see what does and doesn’t work.
Below you’ll find several ways in which you can measure the effectiveness of your marketing efforts. If you have any others that aren’t included, feel free to leave a comment below.
5 Tips for Measuring Marketing Effectiveness
1. Determine KPIs
KPIs are actionable metrics – metrics that often result in a significant increase in sales. Repeat usage and data retention are two clear examples of actionable metrics.
The fact that a potential customer hasn’t bought anything from you doesn’t mean that they’re not interested. They’re probably not ready to do it, and it’s important to know how many people you have at every stage of the purchasing cycle. Also, what makes repeat visits more important is the fact that 40% of revenue comes from repeat buyers (which represent 8% of all website visitors).
2. Conversion Rates
Tracking conversion rates can be an invaluable tool for you because it shows different things depending on what you’re looking for. For instance, you can measure conversion rates based on the stage in the buyers’ buying journey to determine the effectiveness of certain campaigns to move leads down the funnel.
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You can also measure them based on channels, to determine the effectiveness of your efforts on various marketing channels. The end goal is usually to spur further action, and measuring your conversion rates is critical in determining the effectiveness of your efforts.
3. Gather Relevant Data
When it comes to gathering relevant data through various analytical tools, you may only get a piece of the information and barely scratch the surface. Even when you notice that, for example, a certain demographic of consumers keep returning, you may not know why they’re doing so.
This lack of information prevents you from exploiting this advantage and improving your business model significantly. In order to get more specific information, you can conduct legitimate paid surveys online.
Remember that you need a large test group in order to get valid results.
4. Pipeline Acceleration and Growth
How do the pipeline acceleration and growth change from one quarter or month to the next? Do your marketing efforts help it to accelerate and grow? The ability of your team to fill the pipeline with fresh leads regularly, and to keep them moving down the funnel is critical when it comes to the overall effectiveness of your marketing.
You need to pay attention to both acceleration and growth – if there’s one without the other, you should take that as a warning that something isn’t working according to your plans.
In that case, re-focus your marketing efforts to keep the pipeline full and flowing.
5. Cost Per Lead and Per Opportunity
You may have tons of quality leads and high conversion rates, but if the cost of doing it is high, how effective are your efforts? Are you achieving your results in the most cost-effective way possible? Are all those leads worth it?
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You might find that investing more upfront brings more valuable leads and opportunities, thus a better return on investment. The aim should be to balance out the costs with the results and quality.
When it comes to determining the effectiveness of your marketing efforts, your end goal should be to grasp a complete picture of how these efforts contribute to your company’s bottom line.
One metric alone is not enough to paint the whole picture, while some metrics may tell different stories when you look at them from different perspectives. Taking on the right perspective is important when measuring marketing effectiveness.
With these tips, you can put yourself in a good position to understand which ones of your marketing efforts yield good results, and which don’t.