May 5, 2017 0 Comment
One of the most famous quotes in marketing history is certainly Peter Drucker’s: If you can’t measure it, you can’t improve it. That’s how important data analysis is to marketing success! So most marketing agencies now report numbers to their clients: 3000 Facebook fans, 15% increase in blog traffic, 22% increase in Twitter mentions. But how is this affecting the business? Does it have any impact on the bottom line?
Clients are really interested in finding out if their investments in marketing initiatives are producing results; which campaigns are working and which ones aren’t. For example, how confidently would you be able to forecast the impact of a 10% increase in your client’s marketing budget on their revenue generation on an annual basis and therefore over 3 or 5 years?
If these challenges sound familiar, then you MUST read on!
But firstly, don’t worry – you are not alone! According to a study by MMA/Forrester/ANA, as many as 87% of senior marketers do not feel confident of their ability to impact the sales forecast of their programs. This may be the reason why many marketers suffer from a lack of credibility with clients and CXOs.
Marketing is an investment – and it is critical to understand how much investment will be needed to generate business, the return that can be expected on that investment and the time it will take to get that return. Marketing technology and automation have now made such data gathering and number crunching more plausible than ever before.
Traditionally marketing agencies have focused on soft metrics like brand awareness, impressions, organic search rankings and reach. While these are important, in today’s times, agencies also need to be able to quantifiably connect their activities to hard metrics like pipeline, revenue, and profit margins. You need to follow-through the entire brand experience cycle: need-evaluate-buy-use-support and not just the fun part of branding!
How to collect relevant data to re-invent your marketing programs:
Define objectives of each marketing channel / program
- Pick 5-6 key metrics to measure – DO NOT fall into the trap of trying to measure everything. Choose metrics that matter to the client and show impact on pipeline, opportunities, revenue.
- Use the language of the business – Talk about metrics in terms that stakeholders can relate to.
- Do not make the mistake of focusing on soft marketing KPIs instead of revenue growth. Bias your mindset toward hard financial metrics.
- Forecast results, not spending: Clients should look at your services not as a cost center but as a revenue generation opportunity
- Focus on data which shows how marketing impacts sales successes, to get a comprehensive view of true ROI.
Ear to the ground approach – listen, learn, re-invent. Repeat.
Data does not always corroborate your initial hypothesis. It is a bad idea to try to stick rigidly to your original plan if you find that initial results do not support it. Agility is crucial when you find that your marketing efforts are actually not fetching the results that your client wants to see. There may be some unexpected trends and some puzzling twists. It is crucial that you use advanced data analytics to diagnose weaknesses, derive actionable insights and modify the marketing plan. Analytics should guide changes to strategy and tactics, based on what may improve ROI.
Analysis and optimization should be cyclical. Set weekly, monthly, and quarterly reviews – treating each review as an opportunity to improve. Build new initiatives as you see what works and what doesn’t. Then repeat the whole cycle.
It is a good idea to use concise visual dashboards to report goals versus actual results for each key metric for every campaign, every channel, etc. and also display trends for those metrics over time. This also helps you to keep track at any given moment of how key metrics stack up against targets, and what to do to improve their results.
Improving ROI means continuously evolving and adapting your campaigns as well as your measurement systems – refining and re-inventing your programs to get better with time.
Sounds challenging? Sure, achieving marketing ROI is never easy. But that doesn’t mean it’s impossible. Fortunately, there’s always help at hand. Across its engagements, Xenia Consulting always focuses on metrics to make sure that we are improving all the time and we continue to deliver measurable results to our clients.
Regards – Atul Dhakappa