You get what you measure.
Most marketers know this is true, yet how do you ensure your marketing programs are marching toward success? As a marketer, you have to measure the single most important metric to your company: revenue.
How is your marketing team contributing to sales and revenue? Which marketing activities are generating positive returns? And which ones aren’t?
Your career as a marketing professional depends on not just measuring clicks, opens or leads, but on measuring revenue.
According to recent surveys, 62 percent of top-performing marketers measure the return on investment of their marketing efforts. Yet, only 23 percent of all other marketers are measuring ROI. The takeaway is clear: If you aren’t measuring for ROI, you may be optimizing around the wrong metric.
Furthermore, how can you prove to your CEO that marketing is making a positive contribution to sales and revenue? According to one study, 80 percent of CEOs don’t trust marketing — most likely due to the fact that only 43 percent of CMOs are using ROI to justify their marketing budgets.
Historically, measuring the revenue contribution of marketing has been incredibly difficult. The reason? It’s an imperfect science. There are ad campaigns, events, Webinars and white papers. There’s your website, email, Twitter, pay-per-clicks and more. Customers are interacting with your brand in every nook and cranny of the digital and physical worlds. How can you possibly keep up and measure the ROI of all those different efforts and channels?
Here are three tips to help you get started with measuring marketing’s impact on revenue:
1) Track everything at the individual level.
Start by tracking exactly which customers are interacting with your different marketing campaigns, events and content. Then, combine this data with your sales or CRM data. With your marketing and sales data tied together, you can now see which customers have both interacted with your marketing activities and made purchases from your company.
2) Identify the right attribution model.
Do you want to attribute revenue to just the first or last marketing campaign a customer interacted with? Or do you want to factor in every marketing activity a customer touches? For complex sales, some marketers attribute revenue evenly across all marketing touch points, as it’s difficult to pinpoint exactly which marketing activities are “responsible” for revenue across a multi-week sales cycle.
The key is to get started. Once you’re tracking interactions and have a model in place, you can add more complexity to how you attribute revenue, perhaps adding more weight to certain touches in the buying cycle as you gather insights about how people are interacting with your company and content.
3) Make sure you have a significant data set.
Once you implement revenue tracking within your marketing department and start seeing results, the typical response will be to optimize immediately. Don’t. Make sure you have a full data set before making major changes to your marketing calendar.
How do you determine this? For starters, you’ll want to make sure your campaigns and activities have had enough people interact with them and run long enough to ensure that you can properly measure how effective they are within your business’ buying cycle. You should also make sure you have data on multiple types of marketing activities (campaigns, mailings, website content, events, etc.) so you can compare and evaluate them against each other.
So, what are your tricks? How do you measure ROI and prove marketing’s worth at your company? Share your thoughts below.
1) “3 Tips for Measuring Marketing’s Impact on Revenue”
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3) “Marketing Automation Baby Steps to Get You Started – and Yield Immediate Returns”