Marketing 101: Measuring Success
You set goals, you outlined objectives, you developed a great strategy, and you implemented a variety of tactics.Your marketing plan is in place. But, is it working?
It's time to measure success. And here are a few steps to get you started.
1. Define success. You won’t know if your marketing is effective unless you have a good definition of success. This needs to be based on your goals, objectives, strategies, and tactics. Success should also be based on both short-term and long-term results. Since marketing is a long-term process that leads to growth over time, success should be realistically defined. You may experience some quick results, but there is no one-size-fits all button that will immediately solve all of your problems or achieve all of your goals.
2. Choose your tools. There are many analytical tools available to monitor the results of marketing tactics. There are diagnostic programs to show social media engagement, email open rates, conversion rates, and other factors. Choosing the right tools for different tactics is essential.
3. Evaluate tactics. Once you have chosen your tools of measurement, evaluate your tactics to make sure they are effectively accomplishing your strategies, objectives, and goals. Be flexible and willing to change things that aren’t working. Fortunately, it’s easier to adjust tactics than to start a completely new strategy. But, it is also important to make sure all aspects of your plan are working together effectively.
4. Research. Research is an ongoing step in the marketing process. You start with research to devise a plan and you utilize research to help ensure you stay on track. In this step of the research process, pay special attention to how your product is perceived, how customers are reacting to your tactics, how competitors view your product, or what is being said about your company online.
5. Repeat. Be prepared to routinely measure your success through analysis of your existing tactics. Because the marketplace is constantly changing, your marketing plan needs to be flexible and easily adaptable. You will need to continually measure success to make sure you are able to meet your goals.
There are a few things to look at when measuring success.
Key performance indicators KPI(s) are specific metrics that are tracked to gauge overall performance and progress toward a goal. There are many types of KPIs that can be assessed, depending on the information you need.
A few examples of KPIs include:
Return on Investment- In marketing, the return on investment (ROI) is calculated with this equation: (sales growth-marketing cost) / marketing cost = ROI. Put simply, it is a way of measuring the return from the amount spent on marketing. This KPI can help you decide if you are getting your money’s worth from a specific campaign or your overall marketing plan.
Sales Revenue- Sales revenue is the amount of sales brought into your business from marketing efforts.
Customer Acquisition Cost (CAC)-The customer acquisition cost is the amount spent to acquire a customer. This can be calculated by dividing the total number of marketing cost by the amount of new customers.
Customer Lifetime Value -The customer lifetime value (CLV) is the total amount of revenue a single customer will bring to your business. One important thing to look at is the relationship between CAC and CLV. This can really help you see the effectiveness of your marketing.
Engagement involves interaction with potential or existing customers. A few examples include comments on websites or social media channels, shared content, or even time spent on a website.
Conversion Rates- Conversion rates are based on the amount of leads or prospects who become customers. This is arguably one of the most important KPIs for any marketing plan, as it directly affects your business profits.
Of course, your overall plan will determine the specific KPIs you want to measure. Regardless of your approach, make sure you have a way to measure success.
Here are a few final tips:
Remember that measuring success affects future decisions.
Make sure tactics align with strategies, objectives, and goals.
Make sure you have a clear definition of success.
Make sure you are measuring the right data.
Don’t waste time, money, or other resources on the wrong things.
Focus on value, not just activity. Make sure you are getting the most bang for your buck.
One of the ways The Social Bullpen provides value is by creating custom marketing solutions to provide clients with what they need based on their definitions of success. If you need help with any aspects of your marketing plan, we want to help.
This is part four of our Marketing 101 Series. For part one, see Marketing 101: The Four Ps of Marketing. For part two, see Marketing 101: Do You Know Your Audience? For part three, see Marketing 101: Choosing the Right Tactics.