How to Measure Your Marketing Efforts
It's true we spend marketing dollars to display at trade shows, attend events, hold conferences, host webinars, advertise and to produce marketing materials for campaigns.
How do we know what we are getting in return? How can we quantify the results of our marketing efforts to make sure they are worth the money spent?
This may seem like an easy question, however, it's one that I am asked often. I have seen companies that don't measure their marketing efforts. Let me just say that's a big mistake. While marketing can be for the most part trial and error you can diminish errors by actually using calculations to see which campaigns are bringing in the most results for the money.
It's vital to develop a consistent plan and marketing strategy that will help you project, measure and evaluate your marketing campaigns, without it, you are simply going about marketing blindly. This is one of the most costly mistakes in business.
In each marketing campaign you must develop a plan and strategy that identify the following:
- Quantitive and Qualitative goals: Qualitative goals are different than quantitative because they address the promotional advantages vs. numbers to measure. Your qualitative goals should be about customers' perception of your product and/or service. For example, increasing the perceived value by offering a discount or lowering the price of your offering. Positioning is also qualitative, where does your product and/or service rank when it is compared to your competitors. You increase the position of your product by educating on the quality of the product and/or service that you offer. You can also increase the positioning by going after a specific niche or targeted market and presenting that specialty as an expertise. Awareness is also important when it comes to qualitative data. You must create an awareness of what you offer. This is important in order to get the consumer to purchase from you. You can often increase awareness through advertising efforts. Quantitative marketing is about the numbers. How many attendees, how many units sold, or how many leads captured.
- Campaign budget: What will you spend in order to achieve the qualitative and quantitative goals you have set? What is your desired outcome when it comes to that budget? What will deem the spend as a success?
- Fulfillment and response strategy: How will you fulfill orders and or services and how will you respond to those that reach out based on your marketing strategy?
- Follow-up Strategy: What is your follow-up strategy? Will you use lead nurturing in order to stay in touch with those consumers that do not purchase immediately? If they don't buy how will you follow up with them in order to close the sale?
- Tracking and testing criteria for your campaign: Depending on your objective most goals can be measured effectively using one of three methods. These methods include cost per sale, cost per qualified lead, and cost per visitor
Calculating the Costs
Once you decide which result you want to measure and you have the costs incurred for the event; calculating is actually fairly easy.
- Cost per Sale = Amount Spent for Event/Campaign (A) / Number of sales (S) = Cost per sale (CPS)
- Formula: A / S = CPS
- Cost per Qualified Lead = Amount Spent for Event/Campaign ( A) / Number of Qualified Leads (L) = Cost per qualified Lead (CPQL)
- Formula: A / L = (CPQL)
- Cost per Visitor or Response = Amount Spent for Event/Campaign (A) / Number of visitors or response (R) = Cost per Visitor or Response (CPR)
- Formula: A / R = CPR
Using these formulas along with a developed plan for each campaign will give you the information you need to decide if a campaign or event was effective for your business. If it was...congratulations! If not, it's time to visit the efforts of the campaign and find out exactly why it didn't work and how you can improve it the next time. Was it the event location, wrong targeted marketing? Perhaps the materials that you sent out didn't carry a strong call to action?
There are several reasons why a marketing campaign may fail and not bring you the desired the results, but future successes will come from determining what those reasons are.