In an ultra-competitive business environment, marketing remains a critical factor that can contribute significantly to the overall success of a business. That’s because an effective marketing strategy:
- Builds brand awareness
- Boosts conversion rates
- Drives growth and revenue
Given the benefits of a successful strategy, it’s no surprise that demand for digital marketing solutions is growing. Last year, 63% of businesses increased their digital marketing budgets, while the industry is growing at an average rate of 9% per year.1 However, without a clear understanding of the impact of your marketing strategy and the metrics to look at, businesses have no way to measure success or improve processes.
In this article, we’ll explain how the impact of marketing can be measured, helping businesses maximise return on investment (ROI) and boost their bottom line.
Measuring marketing success
So, how do businesses measure the impact of their marketing? First, it’s important to note that marketing is a catch-all term for a range of activities designed to generate leads, and boost sales. These activities include, but are not restricted to:
- Email marketing
- Social media
- Paid advertising
As such, there’s no single metric to define marketing success. Instead, businesses can use a range of marketing metrics to examine the impact of their strategy, including:
- Return on investment (ROI): ROI shows the direct correlation between marketing activities and sales. Businesses can measure ROI either on a per-campaign basis or holistically before using the results to assess what’s working and what isn’t. This makes it easier to set marketing budgets and justify marketing spend moving forward.
- Social metrics: Social media is a great way to engage existing customers and attract new ones, and also provides access to key performance metrics that allow you to understand the impact of marketing campaigns and content. Some platforms also allow you to build online communities where customers can discuss products or services, and get answers to product-related questions.
- Analytics reports: An analytics report should provide a detailed overview of how a campaign’s results measure up to its goals. One drawback, however, is that they are generated weeks or months after the campaign has finished, meaning they can’t improve outcomes in real-time. Despite this, they can still serve as valuable indicators of what and how to improve in future marketing campaigns.
- Cost per lead (CPL) and cost per win (CPW): CPL measures how much a business spends to generate a lead — calculated by dividing the cost of lead-generating activities by the number of leads acquired. CPW measures how much the business spends to generate a single sale. For example, if a marketing campaign costs £5000 to run and resulted in 100 sales, the CPW would be £50.
Broaden your understanding of your marketing performance
Data is playing an increasingly important role in measuring marketing impact. And the good news is that businesses have access to more data than ever before, with 2.5 quintillion bytes of data created each day.2
But raw data is like a raw material — it needs to be transformed into something usable. For example, businesses need to carry out a series of processes to turn their raw data into actionable insights, including:
- Data collection: Data is collected from multiple channels, platforms, and systems before it is consolidated in a single location.
- Data cleansing: The data is cleaned, removing information that is inaccurate, duplicated, or irrelevant, ensuring that the data is high-quality.
- Data visualisation: Using cutting-edge data visualisation tools, the resulting insights are presented in a clear, graphical, actionable way.
- Data analysis: The data is then analysed to extract useful information that can inform decision-making.
So, let’s take a look at some of the data-driven techniques that can enhance your understanding of your business’s overall marketing performance.
In simple terms, an attribution model is a method used by digital marketing teams to identify how much each of their individual marketing channels has contributed to sales efforts.
There are a variety of attribution models that can be used to distribute the value of a conversation across each touchpoint differently. The six most commonly used are:
- First interaction
- Last interaction
- Last non-direct click
By implementing attribution modelling, marketers can take a holistic view of their efforts. That means measuring the marketing effectiveness of keywords, ads and landing pages, helping to identify which are driving the most value in the long term.
However, attribution models will be impacted by Google’s decisions to phase out third-party cookies in Chrome by 2024, making it difficult to identify, target and measure users and generate consistent user IDs across the funnel.3 Fortunately, businesses can prepare for this by turning their attention to first party cookies.
First party cookies offer another way for websites to collect relevant data. As a result, businesses can benefit from implementing tools that narrow down on first party data and better utilising first party data that they already have for the development of relevant consumer profiles that include age, location, and browsing history.
Product performance analysis
The practice of utilising data to analyse the performance of a specific product is known as product performance analysis. This approach looks at every aspect of the customer journey, including data related to marketing, sales and other metrics.
By undertaking product performance analysis, businesses are able to gain a better understanding of:
- Which customer segments products appeal to most
- The number of returning customers
- Which product details or features are being used and which aren’t
By using customer data in this way, businesses can gain insights into how their marketing approach has impacted the type of people using their products — identifying common characteristics that allow them to build an understanding of their target audience.
Armed with these insights, marketing teams can build optimised campaigns that target the right people, making it easier to boost conversion rates and increase customer lifetime value.
In-depth user journey analysis
User journey analytics is the process of undertaking an in-depth analysis of customer behaviour across numerous touchpoints over a specific period of time.
This is an approach that is gaining momentum as businesses recognise the value of customer journeys as a means of monitoring customer experience performance and identifying opportunities for improvement.
By implementing this analysis, marketers are able to gain a better understanding of how their current engagement with customers and prospects via their marketing channels is working.
Furthermore, marketers can also use the insights they can obtain with journey analytics to optimise the way in which they engage with their users throughout the customer journey.
Start measuring success and improving outcomes
Data can unlock massive improvements in your marketing strategy by highlighting what’s working and what isn’t. However, many businesses don’t have the in-house expertise required. What’s more, attempting to become a data-driven business without the right skills and tools is likely to result in poor-quality data and inaccurate insights.
As a result, working with outside providers is becoming increasingly popular for businesses that want to enjoy the benefits of data-driven processes without the hassle, costs and risks of an in-house approach. That’s where Jarmany can help.
By partnering with us, you can access the expertise, skills, and tools required for an effective data strategy. You’ll be able to undertake marketing impact measurements, identify areas for improvement and optimise decision-making. We help our clients become more data-driven with:
- Data strategy: We can help you build comprehensive and successful data strategies
- Data platforms: We take a tech-agnostic approach, tailoring our tools and technology to suit your needs
- Data science: We build complex AI solutions that help you plan for today and predict tomorrow
- Data people: Our team of data experts is on hand to help you realise your goals
To find out how Jarmany could help you unlock the power of data and measure the effectiveness of your marketing activities, get in touch with us today and talk to a member of the team.