Gone are the days when businesses could not determine the effectiveness of ads, PR, print media, and events, and hence could not justify their marketing spend.
Today, tables have turned, and with the right tools and knowledge of the metrics to track, you can measure the effectiveness of your marketing campaigns. Also, you can set goals to propel your marketing campaigns and achieve greater success. This article explains the benefits of setting goals for your marketing and an array of metrics to measure marketing success.
Why Set Goals for Your Marketing Campaigns?
Failure to set goals for your marketing endeavors is comparable to driving your car blindfolded. You don’t know where you are headed and could end up crashing.
However, with SMART goals for your campaigns, you get direction and a sense of focus. SMART goals are sensible, measurable, achievable, realistic, and specific. Here are the benefits of setting SMART marketing goals.
- Measure the progress of your campaign
- Determine whether a campaign was a success or not. You can use this information to inform future campaigns
- Ensure optimal marketing performance
- Keep you motivated and focused
- When you create marketing goals that align with overall organizational goals, you position your business for success.
Metrics for Measuring the Success of Marketing Campaign
Whether you are a small business owner or employee, your work does not stop at setting marketing goals and working towards achieving them. It would be best if you went a step further to measure whether your marketing campaigns have the intended impact.
There is no single way to measure the success of your marketing campaigns. It all depends with the type of campaign and channel. Nevertheless, some metrics can help you determine if a campaign is working or not. Here are some of them.
1. Conversion Rate
It refers to the percentage of visitors who take the desired action, such as downloading an e-book, email sign up, or making a purchase. For instance, if your website receives 500 visitors in a month and 100 of them make a purchase, the conversion rate is 100 divided by 500, which is 20%.
A high conversion rate portrays successful marketing. It means that people are interested in what you are offering and can get it easily. On the other hand, a low conversion rate indicates that your messaging is off, or you are attracting the wrong visitors. You can increase conversion rates by modifying your campaigns to suit your target audience.
2. Customer Acquisition Cost (CAC)
How much you use to acquire a customer can help you gauge marketing success. Start by determining all your marketing expenses, including overhead, technology and software, and salaries. Then divide this cost by the number of new customers you acquired in a given period.
For instance, if you spent $5,000 in marketing expenses in a month and acquired 25 customers, then your CAC is $200. With this cost, you can tell the effectiveness of your marketing efforts.
If the expense of finding, convincing, and onboarding new customers is too high, the success and profitability of your business in the long-term is questionable, as is your marketing campaign.
3. Customer Lifetime Value (CLV)
Determining the value a customer brings to your business in their lifespan is fundamental for any business. You can calculate CLV using the following formula;
Average sale per customer × number of times the average customer buys annually × the number of years the average customer stays with your business
The CLV can help you determine how much you should spend to acquire a customer. For example, if your CLV is $800, then you should not spend above this figure to acquire new customers. If your CLV is $800 and you spend $300 on CAC, your marketing is performing quite well.
You can improve your CLV by creating lead nurturing campaigns for existing customers to inform them about new services, products, and resources.
You can measure the success of a marketing campaign by determining whether people are engaging with your marketing efforts. Monitoring engagement can tell if people are responding to the information you are offering and whether you should keep doing it or consider a different direction.
An excellent way to measure engagement is the amount of time people spend on your website. When visitors spend a considerable amount of time on your website, it means that they are finding what they are looking for and getting value. People spend time on a site reading content, viewing different pages, and examining offers.
5. Net Promoter Score (NPS)
It is a marketing metric that allows you to know whether customers would recommend your company to other people. It tells if your customers are willing to tell their personal network –family and friends about your brand.
NPS depicts successful word of mouth marketing and is a multiplier for your marketing endeavors. A high NPS indicates that your marketing campaign is working, and your company is positioned for success.
6. Return on Investment (ROI)
ROI is the king of marketing metrics. No business wants to spend money on a tactic that is not generating revenue. You don’t want to continue pumping marketing dollars on an activity that is costing you money.
An effective marketing campaign should give a high return on investment. You can calculate the ROI using this formula;
Gain from investment – cost of investment =ROI
For example, if you spend $500 on email marketing and get $1,500 in sales, your ROI is $1,500-$500=$1000.
Even if you assess the CAC and time spent on site, if they don’t give substantial revenue, then you may be spinning your wheels without getting real traction. Regardless of the marketing methods, the ROI of each method determines its efficacy.
Thanks to technological advances, you know whether your marketing campaigns are working or not. There are numerous tools and metrics you can track to determine the effectiveness of marketing campaigns. This article explores six metrics for measuring marketing success to optimize your marketing efforts and dollars.
Also, feel free to contact us for marketing campaigns that get the desired result.