Just like how you will not run your business blindfolded, you need to remain alert to the results of your company’s marketing initiatives.
The question is: How do you measure your return on investment when it’s not as straightforward as dollars and cents?
Here’s how the top marketers track campaign outcomes and measure marketing effectiveness.
What to Track?
Look back to the objectives of your marketing campaign, as the key performance indicators change depending on the desired outcome.
Raising awareness: Track the number of unique views your advertising campaigns are generating across your chosen platforms. There are tools readily available for you to track your views and engagement across your social media platforms – Google analytics, YouTube analytics, Instagram, and of course, the total exposure of your influencer marketing. More on that later.
Conversion: Keep track of the percentage of people who visited your site and took an action that your content invited them to. For example, if your call to action (CTA) is to subscribe to your company’s newsletter, and 10 out of 100 unique visitors to your website signed up, that makes your conversion rate 10%.
Increase brand loyalty: Besides buying your products and services, another way your customers can display loyalty to your brand is to give you feedback. Whether the feedback is good or bad is irrelevant, as customers only engage with a brand if they care about the company in the first place. Since this is typically done through surveys, the data is easier to capture.
How to Measure?
Assuming that you have launched your campaign and you have been diligently keeping track of your numbers, not only will the data tell you everything you need to know about the current status of the campaign, it will also help you make decisions regarding future improvements.
For the purposes of a visual example, we will be using mock numbers for the data tabulation, but you can put your own numbers in the table to interpret your own campaign’s results.
Let’s say you have spent RM1,000 in your advertising budget to post an ad, and you had generated 10,000 reach or engagement (likes, comments, etc). That makes your cost per action (CPA) RM0.10. In short, you are paying RM0.10 for every like and comment you have received.
Suppose out of the same 10,000 engagements, you generate 1,000 warm leads. Which means each lead is costing you RM1.
If your conversion rate is 10%, you will be converting 100 paying customers from the 1,000 warm leads you generated, with an ad budget of RM1,000. Which means, for every paying customer you get through this campaign, you have paid RM10.
Now, let’s say every time you sell your product/service, your average revenue per user (ARPU) is RM100. Since you have successfully converted 100 paying customers, that makes your total revenue from this campaign RM10,000.
So, what can we conclude with these numbers?
For one, this mock campaign is highly successful! For every RM1 you spent with this campaign, you have earned RM9 in return. At this point, top marketers will not hesitate to increase their budgets, as that will directly translate into higher revenue.
Tweak as You Go
Part of the fun in marketing is tweaking and making adjustments along the campaign to generate even better results. If you want to call it a day after getting your desired results, that’s fine as well. If you want to take it a step further, here are some things you can do.
Optimize Your Ads
If you weren’t doing it during the initial stages of the campaign, this would be a good time to optimize your ads to fetch higher reach and engagement.
Since your content is your first point of contact with your customers, you will want to make sure your content is not only creative but also targeted towards your ideal audience. A/B testing is mandatory to gather data of your customer’s behaviour, and also to help you craft quality and attractive content. You can see in the chart, what a difference you can make to your total revenue just by optimizing your ads.
We are all going to assume going after one advertising channel is enough, but in reality, you can optimize your ads by trying out another method of advertisement as a form of optimization effort. There are many digital ads channels – Google Ads, Instagram Ads, Facebook Ads, influencer marketing, email marketing, affiliate marketing, SMS, etc – so feel free to pick the channels that will be the most beneficial for your campaign.
Perhaps you are of the opinion that your ads cannot be more attractive than it already is, or you are simply not good with it at all. If that’s the case, you can choose to improve your conversion rate instead.
What can you do to increase your conversion rate? Speak to your sales team to understand what they need in order to boost their performance. Do they need sales training? Are they familiar with your company’s products and services? Do they need help with sales follow up? Instil company DNA and customer success rituals? Your sales team will be more than happy to share as their results will be reflected in their commissions as well.
As you can see, if you can increase your conversion rate by another 10%, your revenue will increase twofold, and this is an effort that can impact your sales beyond just the present campaign.
Increase Your Average Revenue Per User (ARPU)
If you make RM100 in revenue for every sale you close, what can you do to increase that revenue in a single deal? Through value-added services, of course.
Whether it is through cross-selling, packaged deals, or bundled services, value-added services can be a win-win for both you and your customers. A hair salon offering two services bundled in one gives their customers the option of saving a trip to the salon, while at the same time raking in more money for the business.
Bundled deals like "50% off second items" by major retailer G2000, or "get your meal on the flight" by major airlines like AirAsia work to generate additional revenues in a single transaction. The trick is, always ask your customer, would you want to top up a little to get something else!
Now, If You Do All Three…
Just increasing engagement, conversion rate, or average revenue per user already generates higher revenue for your business. If you decide to improve in all three areas at once, you will have the opportunity to max out your returns.
Ideally, you will want your chart to look like the highlighted row, where your content is attractive and so attracts more customers and more leads, your sales team is working hard and converting leads into sales, and they are selling value-added services along with the regular products and services, thus generating even more revenue.
In our example with mock numbers, a RM1,000 marketing budget fetched a total revenue of RM80,000, and the best part is, this is not the furthest you can potentially take your marketing campaign.
Maybe your creative team can fetch even more engagement, maybe your sales team is so strong you can convert 50% sales, and maybe your ARPU was already high to begin with.
Simply speaking, this chart will show you the feedback of your marketing campaigns and the direct results, so you can make adjustments to both your campaign and your business.
If your chart looks anything like the above, increase your budget immediately.
If your campaign isn’t working, where are you falling short? Do you need to increase engagement? Is the engagement not converting? If you know this, you can do something about it.
Ultimately, there is also the possibility that your campaign is entirely not working, and you’ll need to scrap the idea and get a new plan. However, if you can face your result and learn from it, your next campaign will most likely generate a better outcome for your business.