While this has been done more through intuition in the past and basic tracking, it’s time for this client to fully understand how to capture data in detail and measure accordingly so they can truly know what works and what doesn’t. Here are some key considerations to keep in mind.
1. Determine Your Goals
Is the key goal for your marketing campaigns to generate leads for your business? Or are you providing thought leadership and ensuring you’re top of mind when someone is thinking about your industry, to nurture leads for the longer term?
Are you the brand that you want everyone thinking about first?
Determine what your goals are for every single marketing investment in the first place, and from there, you can then figure out the best way to measure results for these goals, and if there are any gaps.
2. Sort Out Your Financials
What data do you need to calculate your ROI? Major Key Performance Indicators (KPIs) may include Customer Lifetime Value (CLV), conversion rates from initial contact to Marketing Qualified Leads (MQLs) to Sales Qualified Leads (SQLs) to Closed customers, the cost to actually produce your product or service, and your revenues.
Companies can have a long and complex sales cycle, so sorting these financials out may be difficult for some more than others, but it’s still better to have a minimal calculation in place than none at all.
Get the help you need from your finance team, your CRM or marketing platform data, and anyone else who can provide useful inputs and understanding of your financials.
3. Set Your Marketing Budget
Once you have a clear picture of your marketing investments and the return on each one, you can take one step further and understand your Cost per Customer Acquisition (CPA) for each if you don’t already have this information broken down by investment.
Does the cost to get a new customer make it worthwhile to spend as much as you do in the process for each channel or campaign? Does the longer term benefit outweigh the shorter term costs? Can your business sustain itself while investing in a specific type of marketing?
For example, it can be interesting to see how you may have been spending a ton of money every year attending trade shows, where you only end up getting 1 or 2 customers out of it over time, whereas you can spend much less on online marketing channels to get much more visibility and many more clients. Where is your money better served?
4. Make Decisions Based on ROI
Once you have made these calculations, you are now better setup to make appropriate decisions for your company.
Which campaigns lead to a better Return on Investment and a lower Cost to acquire a new customer or client? Are these scalable? Focus on those channels and potentially reduce or stop your other campaigns (unless your goal is brand awareness, and you need to be where your competitors are). If you have one campaign that provides you with a return of 80% and another that provides a return of 10%, which one will you focus on more next time around? Can you increase the return on both of your campaigns with a few optimizations here and there, or perhaps you want to focus only on improving the higher returning campaign?
At least you’ll be able to understand what’s working, and then focus more time on strategy and execution, investing in that area.
5. Continuously Track and Improve Results
Continue to update your calculations and results on an ongoing basis. Over time, you’ll get a clearer picture and more detailed calculations to help inform your marketing strategy and investment decisions.
Learn, improve your reporting, returns, and marketing capabilities, and in turn, generate more profits and revenues for your business.
Summary
To summarize, when Measuring the ROI of Your B2B Marketing Campaigns:
- Determine Your Goals
- Sort out Your Financials
- Set Your Marketing Budget
- Make Decisions Based on ROI
- Continuously Track and Improve Results
Now that you understand more about Measuring the ROI of your Marketing Investments, please check out our recent blog posts covering more useful Inbound Marketing tips.
If you liked this video, subscribe to the Umami Marketing YouTube Channel and the monthly Digital Marketing Postcard. I’ll be back again in August to answer more of your questions. See you next month!
