Measuring Marketing ROI Part 4 – Not “ROMI Made Easy”

Continuing a series of blogs on Measuring Marketing Return on Investment (ROI):

Measuring Marketing ROI – Why Marketing is Not an Expense
Measuring Marketing ROI Part 2 – Tips to Overcome Challenges
Measuring Marketing ROI Part 3 – Developing ROMI Revenue Metrics

Activity Metrics: Measuring the Marketing Details

Executive management may or not may not want to hear the details about which programs or campaigns deliver the best results, but your marketing team certainly does. After all, your day-to-day program execution – everything from email and social media to webinars and web site traffic – provides the insights that ultimately drives your strategic revenue-building efforts.

The metrics that you can extract from email campaigns, web analytics, webinar attendance and other sources are too numerous to go into here. Since websites are such a crossroads and anchor of many other marketing programs, I’ll look at some website metrics. But first, there are some general Activity Metrics measurement criteria that you can use:

Benchmarking Metrics

Marketers track a wide variety of day-to-day program activities because they are easy to measure. These include benchmarks such as:

  • Email marketing and enewsletter open, click-through and response rates
  • Web site visits and page views
  • Content asset downloads such as white papers or published news stories
  • Web site form completion and abandonment rates

These numbers can be very useful. If your email open rates begin declining from the historical rates you’ve previously captured, then it’s time to examine your email campaigns for potential problems. The same is true for web analytics, especially when you compare current data versus historical trends for page popularity and page abandonment rates.

Social media mentions, connections, “likes” and conversations are similar to other softer benchmarking metrics; you’re often comparing your metrics against your own historical data and searching for trends.

The key here, as with benchmarking metrics, is not to confuse social media success with bottom-line impact. It’s one thing to celebrate a record number of Twitter followers; it’s quite another to demonstrate just how those followers convert into leads, opportunities and revenue for an organization.

Measuring Your Brand Power

Back when I first got into marketing in the mid-90s, Chick-fil-A started their campaign “Eat Mor Chickin.” I remember driving on a highway in Atlanta with my new boss and remarking on this billboard and how clever I thought it was. I’ll never forget his response, “Does it make you want to go eat at Chick-fil-A?” He then explained the difference in branding and call to action advertising. In the previous blogs, we’ve talked about call-to-action. Measuring branding is a lot more challenging.

Your marketing investment seeks to accomplish two main goals: grow sales and build customer perceptions of quality service and best-in-class expertise in your brand.

But how do you measure the brand power of your marketing programs in the marketplace?

*Remember that Einstein quote I referenced in the last blog? “Not everything that can be counted counts…” Well, he goes on to say, “…and not everything that counts can be counted.” (It is debated if William Bruce Cameron actually said it, but I digress). The point is, measuring brand power is challenging.

For our purposes at the moment, you need an actionable barometer of brand perception—the sum of the marketing parts of your integrated marketing campaign in gaining and retaining customers.

Brand Survey Parameters

One effective approach is to conduct online pre- and post-marketing campaign surveys.

The pre-campaign survey establishes a baseline of awareness and brand perception. The post-campaign survey measures changes in awareness and perception – up or down – as a result of your marketing effort.

  • Your survey should be conducted by a third party and in no way be associated with your company. This is not your annual “Do You Still Love Us?” customer satisfaction survey. Your marketing agency is a good third-party partner for conducting “an independent survey on behalf of a transportation industry client.”
  • The survey is not about your company. It’s about the industry players in your category, including your company.
  • It should be characterized as a blind survey, so those responding are ensured of anonymity, which encourages their frankness.
  • Target the survey to your best customers, periodic customers you’d like to do more business with and high-potential prospective customers.

Brand Survey Metrics

When you assess the changes in brand equity resulting from your marketing efforts, your survey will account for metrics that include:

  • Brand awareness of your company and competitors
  • Brand relevance to customer needs and challenges
  • Differentiation: how customers perceive your company and your competitors
    are incrementally different

Website Metrics

Every piece of content you create or campaign you run should be designed to drive traffic to your website and dedicated landing pages, giving you the chance to convert visitors into leads and customers.

Let’s review some of the metrics you should be tracking on your website and its landing pages and how to use these metrics to optimize and improve your website’s performance.

It makes sense, then, to start by looking at insights from your web analytics program, such as Google Analytics, which the basic information is free and many of you may be using already.

With Google Analytics, you can track visitors, repeat visitors and organic search to gauge the success of your SEO. You can analyze most/least popular pages and track video, podcast, webinars and blog posts clicks.

Website Conversion Rates

By monitoring your conversion rates, you’ll know how well you’ve been capitalizing on the traffic coming to your site. You can monitor several different types of conversion rates, including:

  • Visitor-to-Lead Conversion Rate: the percentage of visitors who become
    leads through regular site visits, requesting a price quote, downloading content
    or repeatedly attending webinars
  • Lead-to-Customer Conversion Rate: the percentage of leads who become
    customers
  • Visitor-to-Customer Conversion Rate: the percentage of visitors who
    become customers

Tracking each of these conversion rates is like giving your marketing funnel a checkup. You’ll see where you’re doing well— such as converting visitors into leads and aspects of the website that need improvement. Most important, you are measuring metrics that ultimately can impact revenue generation.

You can track the percentage of visitors who arrived at your site through organic search and completed a desired conversion action, such as filling out a contact form, requesting a price quote or registering to receive the company’s enewsletter.

But you also should dig deeper into your web analytics to track conversion rates by:

  • Specific keyword or search phrases
  • Unique landing pages
  • Referring URLs

Tracking these metrics helps you fine tune your SEO strategy. For example, you may discover certain search phrases that don’t deliver tons of unique visitors, but that have a higher than average conversion rate. Or, you may find that high traffic from a common search term isn’t translating into a good conversion rate. So, you are not only looking at quantity, but quality.

Email Marketing Click-Through Rates (CTR)

Organizations can calculate CTR by dividing unique clicks by the number of emails delivered.

Monitoring email CTR is a cornerstone of email marketing analytics, because the CTR indicates whether the message was relevant and the offer compelling enough to encourage recipients to action.

But CTR can vary widely by the type of message sent. For example, email newsletters often have higher CTRs than promotional messages. For that reason, it’s best to benchmark your CTRs according to the different types of emails you send.

Conversion rate is the ultimate measure of an email campaign’s effectiveness. The higher your conversion rate, the more relevant and compelling the offer was for your audience. However, conversion rates are dependent on factors beyond the original email message, such as the quality of your dedicated landing page.

For example, if a campaign underperforms based on your targeted conversion rate, take a close look at the landing page you linked to for reasons why recipients who clicked on a link might not have completed the process. You may find the landing page’s headline or copy needs improvement, or that the registration is too difficult, causing visitors to abandon the process.

Measuring conversion rate requires integration between your email platform and your web analytics. You can perform this integration by creating unique tracking URLs for your email links that identify the source of the click as coming from a specific email campaign.

The Road to Marketing ROI Success

To make progress on the ROMI measurement front, marketers must shift from tactically based metrics to metrics more closely linked to financial and business outcomes.

I wish I could have titled my blog “Return on Marketing Investment Made Easy.” But unfortunately I can’t. The truth is, marketing professionals face a dynamic and challenging environment in today as they attempt to measure ROMI.

The important thing is to start. If you’re not measuring ROMI, start with some simple metrics and evolve from there. If you are measuring ROMI, add some incremental improvements.

Remember that the objective of ROMI is measurement of economic value. But the goal of ROMI is improvement – improvement of company revenues and improvement of the quality and effectiveness of your marketing programs.

Innovative marketing and effective measurement of marketing ROI require leadership and continuous improvement. But, for the moment, think ROMI measurement as work in progress. If you work it, you’ll make progress.

Rick Verbanas has brought his passion for marketing to Fortune 500 companies, small businesses and not-for-profits. He strives to stay current in the latest marketing best practices, and provides a weekly roundup for your news and enjoyment. To subscribe to future blogs, please enter your email address on the left hand side of the page.

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