These days, everyone wants to go viral — or at least see their marketing efforts result in either more sales, client acquisitions, or visibility. But with so many different marketing tactics available, quantifying success can feel like a tall order. However, this is a critical step that businesses must take to ensure that any budget allocated towards marketing efforts is being used effectively.
Many businesses may not realize that not all marketing tactics carry different measures of success. As such, you can’t look at everything through the same lens. Understanding how to realistically determine whether a campaign is a win or a dud is critical for any marketing team that needs to justify future budgets. Keep reading for more tips on how to effectively measure return on investment for various digital marketing strategies.
Measuring ROI for Product Promotion Campaigns
Not all marketing campaigns are created equal. This means that determining success for a product promotion is different from general brand recognition campaigns. If we create an example of a clothing store that wants to promote the launch of a new collection, the ultimate goal is to drive sales for those new products. So, all digital marketing efforts designed around the collection launch have an overarching aim to increase sales of products related to that collection.
Determining marketing return on investment becomes easier because you can draw a direct line between marketing campaigns highlighting the new collection, increased traffic to your physical or online store, and any sales for those new products. As a result, if you see an uptick in sales for the new collection shortly after launching the accompanying campaign, it’s easy to determine marketing success. However, if you’re launching a general awareness campaign or marketing a product or service that has a longer customer acquisition cycle, it might not be as easy to immediately determine campaign success.
Measuring ROI for Lead Generation Campaigns
For many businesses, lead generation is the ultimate goal. Maybe a company has a team of sales reps that are tasked with opening new accounts or increasing sales for existing customers. An obvious sign of marketing ROI would be opening more accounts or convincing existing customers to increase their recurring orders. But this mindset might not give you an accurate picture of how well a campaign is performing.
In particular, if your marketing campaign is bolstering lead generation, your first step is to consider the total timespan of the customer lifespan. The more expensive or complex your product or service offering, the longer it will take to onboard a new customer. For example, consider a lawn care company that wants to increase its residential client roster ahead of the spring-summer season. However, there’s a caveat — they specifically want to target clients with larger lawns, which translates to a more expensive monthly fee and more revenue generated.
Homeowners with small lawns might eagerly sign up after interacting with a simple geo-targeted campaign. They may have minimal questions during the onboarding process beyond confirming that they need their lawn trimmed once a week and agreeing to the price. While this is a nice bonus, it’s not the campaign’s main goal and can’t directly be considered a sign of positive marketing ROI.
By contrast, a homeowner with a larger lawn may need additional landscaping support such as tending to existing plants or even planting new ones. This customer might not sign up immediately and instead may need several weeks of communication to pin down overall goals and pricing, and determining the right maintenance schedule. So, in this scenario, the customer acquisition cycle will shift overall success benchmarks to accommodate for the delayed onboarding process. A two-month campaign might not be quantified until three months post-completion. Even then, you can’t simply look at the final tally of customers that signed up for services.
Instead, you need to look at the total number of leads acquired during the campaign lifespan and which percentage of those went on to become active customers with large lawns. Another caveat that will alter success rates is when the campaign launched. If a lawn care company activates a campaign in June with the intent of onboarding new high-value customers for the spring-summer season, the timing is off and will skew results.
Tools for Success
Once you understand how to adjust your calculations for ROI marketing, you still need to know how to track them effectively. In most cases you can use a fairly standard set of tools that have been leveraged since the early days of affiliate marketing to determine whether or not your campaign is living up to expectations. Core options you should be using include:
- UTM and Pixel Tracking: While ideal for ad placement, this is also smart to use if you’re attempting to redirect traffic from one source (i.e. an email or digital ad) to your website
- CRM Tools: If you rely on lead generation to turn curious passersby into customers, a customer relationship management (CRM) tool will help you track leads, determine where they are in the life cycle and which marketing tools were most effective in acquiring that new client.
Does Good ROI Exist for Digital Marketing?
The short answer is, it depends. The truth is that it’s rare for a business to rely solely on one digital marketing strategy as the key to success. In many cases it takes multiple touchpoints and repeated visibility in front of potential viewers to turn a casual browser into a paying customer. Managing expectations is one of the most critical components for measuring ROI.
A general awareness campaign should not be treated with the same level of expectations as one meant to drive sales for a specific product, or even lead generation — even for high-value products or services. The Creative Momentum team is well-versed in not just implementing marketing campaigns, but evaluating and fine tuning them to maximize success and overall outcomes. If you’re ready to have pros refine your marketing strategy, contact us today for a consultation.