Marketing measurement and analysis is critical today in terms of real returns and profitability. Sometimes the sheer affordability of direct mail, email and social media marketing can lure small business owners into a false sense of comfort surrounding this allocation of their marketing funds.
Relaxed attitudes in regards to analysis and refinement means these marketing methods may not be reaching their full potential, which ultimately equals wasted dollars. This is especially impactful for firms that have little to no room for error when it comes to their marketing budgets.
Lean startups and businesses striving for operational excellence – each of which are characterized by the complete eradication of waste – tend to enjoy fewer risks, greater agility and, perhaps most importantly, stronger profit margins over time.
If you want to model your overall business strategy after successful ones such as these, the main takeaway is to understand (and truly believe) that no dollars should be spent unless the investment directly leads to greater revenues, earning potential or decreased expenses in one department or another.
What does this mean for your marketing budget?
When it comes to your company’s advertising, the song remains the same, as leaders must ensure that they are doing everything in their power to make every piece of the marketing budget count.
How do you achieve this? One of the only ways to accomplish this objective is to focus on the accurate and consistent measurement of performance, ROI and engagement, and kill off any marketing methods that aren’t bearing any fruit.
That may be putting the cart before the horse though. The real first step toward improving marketing measurement and analysis is to actually implement it in the first place.
How to get the numbers that matter
When it comes to direct mail, email and social media marketing, data is king. After all, how can you know what marketing investments to continue if you don’t know which are profitable? Below is some direction as to how you can build marketing measurement and analysis into your strategy, but we also have a handy ROI calculator if you’re in a hurry.
Direct mail proves to be one of the more challenging aspects of marketing measurement and analysis. VentureBeat pointed out that losses are logged because direct mail advertisements are sent to incorrect addresses, or non-targeted campaigns cause lead generation to be off the mark. These losses can add up quickly, but are also largely avoidable with the right approach to management.
The easiest and best way to measure the success of a direct mail campaign is to require recipients to return some form of your collateral in exchange for the goods or services you were trying to promote (think returning a coupon for a free oil change, a free meal, a free item, etc.). By obtaining something from each offer redemption and pairing it with the total sales that resulted, you can now track your return on investment.
When your campaign has ended, add up the revenue that resulted from all redemptions, then subtract the cost of the marketing and your cost of goods/labor (the actual cost, not the retail value). The remaining amount is your net profit. Keep in mind too that your profits should continue to grow, as many customers will return to purchase many times in the future, assuming you provided a positive experience for them.
Similar to direct mail, we recommend asking customers to show an email promotion (either printed or on a smartphone) in order to redeem an offer. You could also implement the use of certain promo codes or special phrases to keep track of which campaigns lead to which revenue amounts. Again, by tallying up the sales which result from specific email campaigns, you can subtract the cost of marketing, then goods and services to arrive at your net profit.
You can enhance your analysis capabilities even further by monitoring customer engagement rates on the emails themselves. Talk to your email marketing provider about which of your subject lines tend to garner the highest open rates, and then match that up with whatever offers give your business the highest net profits.
This digital tactic is notoriously harder to measure, but you can take steps to ensure that you’re gleaning some useful data from your social media marketing efforts. Again, you can make use of certain promo codes and coupon offers to track which of your promotions are leading to actual sales.
It’s important to keep in mind, however, that there are certain, crucial trickle-down effects that an effective social media presence provides, even if they aren’t immediately quantifiable. For example, directing more traffic to your site leads to stronger brand recognition and a greater probability of purchasing down the line.
If you’re an active webmaster, use custom campaigns in Google Analytics to track what effect social media ads and posts have on the number of users and their resulting behavior on your website. Develop a strategy to categorize your social outreach, and compare that against things such as brochure downloads, contact form submissions or email list signups to get a better idea of how social media is contributing to the growth of your customer base.
Consider a third-party tool for marketing measurement and analysis
VentureBeat recently explained some of the more prominent challenges business leaders and chief marketing officers are facing with respect to reporting, performance management and metrics in both digital and traditional advertising strategies. In light of these challenges, analytics tools have become the single most sought after solution because of the their ability to help make sense of massive volumes of information.
It goes without saying that you’ll probably need to get the help of your webmaster or developer to implement these tools, but firms are beginning to make use of newly available data to inform their decision making and refine their marketing strategies. In fact, the source explained that researchers from McKinsey and Company found that accurate, integrated analytics solutions can save companies as much as 20 percent on their marketing investment, which is nothing to shake a stick at.
So which tools can you use to get the job done?
- Google Analytics (Free). The juggernaut of marketing measurement and analysis, Google Analytics is the most widely used platform, implemented by businesses big and small across the country. There’s a bit of a learning curve when it comes to navigating the interface, but the data collection is robust, and the potential insights are endless.
- Facebook Insights (Free). This tool, included on the left side of the mini-feed under the “Developer” heading, offers just about everything you need to analyze your Facebook post engagement. You can see how your overall page is performing as well as dive into the metrics for each individual post as well. Additionally, you can use Ads Manager (also located in the mini-feed in the top left) to monitor paid ad performance.
- Google Sheets (Free). Ok, so this isn’t nearly as exciting as the previous two tools, but if you only need basic capabilities, such as tracking coupon redemptions from a direct mail campaign, this may be the ideal solution for you. Because the spreadsheet is located in Google Drive, you can add to it anywhere and give others access to it. Manually record the sales amounts from different initiatives and automatically do the math to see your net profits (or plug your totals into our ROI calculator). Of course you could use Microsoft Excel as well.
The path forward
Businesses getting involved in Print & Digital marketing campaigns ought to know that there are so many factors that can lead to inaccurate record keeping, poor measurement and a lack of optimally efficient marketing strategies. However, simply taking a more intelligent approach to these matters can make all the difference in the world.
When in doubt, partnering with a firm that specializes in not only marketing best practices, but also the measurement and management aspects of the campaigns to boot, can work to reduce the risk of wasteful spending or poor returns on investment over time.