Have you ever had one of the following problems:
I can’t demonstrate marketing’s contribution to the bottom line
I don’t know for sure what’s working
Social media seems like a waste of time
These ring any bells?
If they do, there’s a solid chance you don’t understand the value of your marketing activity, and this needs to be fixed.
Accurate measurement makes marketing a science, rather than a guessing game. So let’s take a moment to talk about metrics and Return on Investment (ROI).
First things first, we need to get really clear on the definition of both metrics and ROI (spoiler alert: they’re not the same thing.)
What are b2b marketing metrics?
Brand chemistry’s managing director and chief alchemist, Zoe Palmer says that b2b marketing metrics are simple standards of measurement that are used to evaluate performance of specific business areas. Metrics often get mixed up with data (the raw information) and analytics (the process of analysing it into something meaningful).
For instance, a lead-to-conversion metric is the standard ratio used to measure how many leads convert into paying customers.
What is ROI?
ROI is your return; the ratio of what you get to what you’ve spent. ROI on marketing efforts should be consistently recalculated to include the lifetime value of a customer - not just the value of the one-off sale.
Comprehending the differences between metrics and ROI sets you on the path to demonstrating the impact of your marketing activities. Once you understand their meanings, you can start to effectively prove or disprove your marketing methods.
Let’s take a closer look at metrics and how they provide value to your business:
Metrics only provide value to your organisation if they are in context with the goal you’re trying to achieve.
Brand chemistry's Head of Content, Andrea Hoymann, explains how crucial it is for businesses to choose the right metrics to answer the question at hand.
“Many organisations are focusing on the wrong metrics - often just measuring for the sake of measuring. Even more don't know what to do with their data. We frequently meet with marketers who’ve inherited data that is not in the right format. Rarely is there any information around the data logic and how it was applied to begin with. This can make it hugely challenging to understand and analyse any historical data. For marketers who want to move forwards quickly, the answer is not to get lost in the impossible-to-understand historical data. It’s to create clear and simple metrics that can be measured from today, and workflows that help us better understand our data from here on.” she explains.
So, in order to put clear, simple, in-context metrics in place, where do we start?
We need to be clear about the goal we’re trying to monitor, and it must be specific and measurable. An easy way to do this is to look at the buyer’s journey.
When the buyer’s journey is broken down into manageable chunks it’s easier to set simple metrics that measure our strike rate in moving buyers from one stage to another.
This helps you analyse whether the marketing tools and assets you’re using are performing the task they are supposed to - and analysing this over time will tell you just how well. Once you have the metric in place, you can then use it as a trend monitor so you can measure and improve on those metrics constantly.
Here are some examples:
- Goal: increase awareness:
- Metric: Monthly Increase in Website Traffic
- Goal: Increase numbers of customers moving from awareness to consideration stages:
- Metric: Monthly Ratio of Website Leads to Content Conversions (where content conversions = downloaded a deeper piece of content).
- Goal: increase numbers of customers moving from Awareness stage right through to sales stage:
- Metric: Quarterly Ratio of Website Lead to Sales Conversion.
Marketers should spend approximately 15% of their time analysing metrics - it is the only way to test, tweak and measure according to the data being analysed, and the only way to know how you’re going to improve.
How often you review your metrics depends entirely on the goals you set.
Be careful not to overshare, though.
Just because you have looked at the metrics and the reports, doesn’t mean the whole company needs to know about it. C-Levels are usually only interested in knowing the overall ROI or cost of customer acquisition. While social media engagement, website traffic spikes and email open rates are important metrics for the marketing team, they have little use for the ‘higher-ups’.
On this topic, Zoe says, “Being able to tell your CEO how much it costs to get a customer, and then showing the C-Suite you’ve brought that cost down over time, reveals that not only are you measuring something valuable that they can use to plan and forecast, but that you’re also managing the marketing function well and respecting the financials of the business. This is how marketing goes from being perceived as the colouring-in department to getting a seat at the table.”
Let’s bring the focus back to ROI
Setting a minimum benchmark ROI for every single marketing effort isn’t an easy task. While it’s an important step to take, some efforts will only start to reap rewards much later.
An example of this is using content as part of your inbound marketing strategy. Well-planned content should have a positive impact on your lead-to-sales conversion rate in the long term, as leads have been delivered all of the information they need to progress from stage to the next. This helps to ensure that sales get only the prospects who are seriously interested in your offering, and not the tyre-kickers.
So if you do set an ROI target before you launch a campaign you need to set a realistic time-frame based on the initiative you are measuring.
You also need to think of ROI in terms of customer lifetime value to the organisation; what is their value to an organisation over their entire lifetime, and and what amount of that would you be willing to invest to get that customer on board? It’s important to calculate in this way, so that you’re able to demonstrate the full value of that customer acquisition to your C-Suite, especially given that new customers are more expensive to acquire than retaining current ones.
How can you achieve your best ROI?
To reach your best ROI you need to focus on achieving one specific goal or action for the campaign and test and measure the impact as closely as you can. It’s impossible to manage or improve what you can’t measure. Don’t think of ROI as a destination either, think of it as a journey, you’ll need to pull different levers in the machine to constantly assess their impact on the ROI.
Our goal at Brand chemistry is to continually help you refine your marketing efforts. Contact us today and find out how we can help you maximise your ROI.
That’s why we’ve put together an eBook with marketers like you in mind. Download the 6 key metrics your boss actually cares about eBook and become a metrics master!