We recently wrote about the different considerations you should keep in mind when creating a marketing budget – but what about when that budget is put in place?
Once you’ve got your strategy and marketing campaigns up and running, how do you successfully measure what is and isn’t working and adjust your strategy moving forward?
From growth metrics to cost per click, lead and acquisition, let’s take a look at the top 10 ways to measure marketing spend.
Keep in mind that not all metrics will apply to you and your business if you haven’t already experimented with campaigns such as paid advertising or email marketing for example!
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Revenue
This is probably the most critical metric for measuring your marketing spend and how well it’s performing.
Simply put – if you’re investing tons of money into marketing campaigns and you’re not gaining any revenue in return, then something may have gone wrong.
Keep in mind, however, that this depends on your marketing goals (maybe you simply want to focus on brand awareness right now as opposed to sales), and that, with most things in marketing, you won’t see results overnight.
Expect to wait at least six months minimum before seeing any results.
Website Traffic
One of the most simple ways to track your marketing spend is to check your website statistics.
This can easily be done via Google Analytics or an analytical tool and can share with you an abundance of metrics in an easy to understand format.
Look at page views, monthly visitors and click-through rate. You can also segment your analytics by source too, such as paid or organic.
Overall traffic can also help measure direct clicks, referral visits and even any traffic you generate from marketing campaigns – so it’s a great place to start.
Cost per Click
If paid advertising is part of your marketing campaign then cost-per-click is one of the most important metrics you should be measuring.
It simply refers to the average amount that you’ve been charged for a click on your ad. As a general rule, a low CPC will allow you to get a greater ROI on your advertising campaign.
Try experimenting with A/B testing with varied ads to work out which one offers the lowest – and therefore more successful – cost per click.
Cost per Lead
Cost per lead is how much it costs to generate a new lead – i.e through running an advertising campaign.
Although it’s also related to paid advertising, this metric measures cost per lead (a consumer clicking on your ad and submitting their details for example), as opposed to how much an individual click costs.
This can be via Google ads or LinkedIn or Facebook advertising, and is a great way to track what is and isn’t working on a customer’s journey.
Social Media Traffic and Reach
Whether you’re just on LinkedIn to network with potential customers or your business is signed up to every social media platform there is, measuring your social media traffic and reach is super important – particularly for brand awareness.
You could analyse the number of leads, customers and traffic coming from each site to help determine which network you should really be focusing on, or you can track KPIs such as engagement and impressions across them all to track growth.
There are plenty of tools that can do this for you – particularly social media scheduling tools – but you can also manually log onto each social media platform to see a range of analytics that best suit your tracking. Additionally, many platforms will also clearly indicate which metrics you should focus on – as they may vary from platform to platform!
Hint: KPI stands for Key Performance Indicator – specific marketing metrics that companies track in order to measure their progress towards a defined goal within their marketing channels.
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Testimonials
Although a little trickier to measure, testimonials or reviews are a great way to see if positive reviews make any difference in customer interest.
Simply combine them with other metrics such as views, customer behaviour or leads to track.
If reading positive testimonials really do encourage potential customers to buy (or turn them into leads), you can place more focus on this content strategy.
For example – could you tempt previous buyers to leave a review in exchange for a discount code for future purchases?
Subscriber Growth Rate
Whether you measure growth rate via social media channels or marketing campaigns, subscriber growth is a fantastic indication of how well your marketing is doing.
By tracking the growth of account base – or email subscriber list – over a specific period of time, you can easily analyse what channels are seeing success and any others that may need more focus.
Cost per Acquisition
Cost per acquisition – also known as cost per conversion – is a KPI or growth marketing metric that measures the cost of a user taking any action that leads to a conversion – such as a sale, an email-sign up or form submission.
So whereas cost per click measures the cost of generating a single click on your advertisements, cost per acquisition is more related to campaign success.
Customer Lifetime Value
Customer lifetime value (LTV) looks at how much revenue a business can expect over the average lifespan of a single customer and is easily worked out by a simple equation yourself. This is important to keep your long-term customers happy and keep them coming back time and time again! You can improve this metric by nurturing your customer relationships and offering fantastic customer service.
Brand Awareness
In this day and age, brand awareness is an important metric to track. Although this ties in with a few of our other points such as social media reach and website clicks, brand awareness tracking doesn’t stop there.
You should also consider using social listening, the volume of mentions (i.e how many times your company has been mentioned online) and engagement across all networks.
Hint: when it comes to brand awareness, engagement rate across social media is just as important – if not more – than views, likes and clicks! A high engagement rate means that more people are commenting, liking, sharing and mentioning your brand and content – whereas a click is just a click!
The trick is to ensure you have clear and concise KPIs in place when you first put together your marketing budget. That way, you can use the above metrics to measure not only how successful your different campaigns are but a better understanding of the costs involved in reaching your goals.
Tracking your marketing spend should be done, at minimum, every quarter – but many businesses find it beneficial to track individual metrics such as social media growth or paid advertising campaigns on a monthly or even weekly basis.
