Big businesses and corporations spend thousands of dollars a year on marketing research, consumer studies, and product development. That is all in an effort to ensure that their financial resources and other assets will help to maximize their profits.
These levels of resources, however, typically aren’t available to the small business owner. SMBs may go off of general sales numbers in relation to lead generation costs in order to ascertain which resources should go where. With the numerous marketing methodologies available today, such as social media, content marketing, and event hosting, accurately measuring ROI can pose a bit of a challenge to businesses with smaller budgets and marketing teams.
Pouring money into campaigns and strategies that offer no concrete evidence of worthwhile returns can quickly lead you into the red, which is why finding the right metrics for your business model can be paramount to your success.
To gauge the effectiveness of your marketing endeavors, develop metrics that remove all ambiguity and replace them with KPIs (Key Performance Metrics) that assign actual numbers to each activity.
How Much Are You Spending?
To get a glimpse of how your marketing dollars stack up against the amount of new business that you receive, you need to break it down to the average cost per lead. How much money per month are you spending on leads in relation to how much money you spend on a particular marketing activity? Once you have this information, try to find ways to either reduce your marketing costs for each activity or work to improve your lead-nurturing processes in order to optimize your monthly expenditures.
Which Marketing Avenues Fit Your Business Model?
Uncover the types of marketing campaigns that work best for your business specifically. If you’re not sure, then take a peek at your biggest competitors and the channels that they use. Try to limit this to competitors that match your business in size and revenue to keep things practical.
Also, take a look at your sales numbers and analyze where most of the leads are coming from, in addition to how long they take to convert. It’s also helpful to test out new avenues to explore potential honeypots for new leads, both online and offline. Take advantage of low-cost lead-tracking software to pinpoint exactly where potential customers are coming from.
- During this process you should be able to answer the following:
- Do your leads respond better to paid searches or content marketing?
- Do you get more leads at self-hosted events, or at larger industry events?
- Which lead sources convert the most prospects?
Are You Using The Right Metrics?
There are dozens of marketing metrics by which to measure the effectiveness of their efforts. Understanding which metric will provide the most meaningful data can help you to increase your engagement and conversion rates.
Below are the most common metrics that marketers use for various types of campaigns.
Lead Scores — This measures the quality of each lead that you receive, which is based on specific criteria that you create such as online activity, customer personas, and other lead details.
Return on Marketing Investment (ROMI) — ROMI is measured by tracking the revenue brought in by each marketing investment. It’s calculated by taking the total amount spent on a marketing effort and dividing it by the dollar amount of sales received.
Content Marketing Traffic – – Website analytics will help you measure the amount of daily and monthly visitors your site receives. Use this to determine how well your paid traffic dollars are performing, or the amount of return you’re receiving from SEO content creation-especially if you’re outsourcing it.
Email Campaign Funnels — Analyze how quickly and the way in which your leads navigate your marketing funnels and be sure to track each stage of the funnel to discover any potential areas of improvement where leads may be dropping off.
Social Engagement — This can include tracking the number of followers on each social platform, the amount of daily engagement/interactions on each such as shares and replies, and how many visits your website receives from each (which can be determined by using custom tracking links such as Google Custom Campaign Builder).
Developing a list of marketing metrics that are relevant to your business can definitely help you more clearly understand where to put your marketing dollars, and it can also provide great forecasting for future marketing endeavors as your business prospects increase.
