Nowadays, most businesses deal with loads of data.
From unique website visitors to social channel followers, management officials can be overwhelmed and confused by how to measure and improve their marketing campaign’s ROI. Setting clear short and long-term goals is the beginning of improving profits and resource allocation.
An online presence and a robust digital marketing strategy enable businesses to grow and scale. Digital Marketing campaigns are often expensive but necessary, and the perfectly drafted marketing approach allows organizations to attain the full potential of these campaigns. Measuring and optimizing your marketing processes helps you identify successful campaigns that impact your business. Establishing specific key performance indicators (KPIs) per your business objectives for every marketing campaign is critical to determining marketing ROI.
As with any marketing technique, you need to determine Return On Investment (ROI) for your digital marketing campaigns. And by measuring and improving it frequently, you can identify what works and what doesn’t so you can scale or optimize your performance.
In this article, we’ll discuss the five ways to run a successful business by measuring and improving your marketing campaign’s ROI.
What is Marketing Campaign’s ROI?
ROI, or Return On Investment, is a key performance indicator used to analyze the effectiveness of an investment made. So what is ROI in marketing?
Marketing ROI shows how much revenue a business has earned in exchange for spending on advertising efforts. In other words, it shows the return on your marketing investment. However, you can also use it to drill down the results of your campaigns.
Measuring marketing ROI and improving it helps you understand the profitability and productivity of each campaign and analyze which marketing channels produce the best results. For example, you can measure campaign results in terms of leads generated, page views, successful lead conversions, and social media followers.
How to measure Marketing ROI?
It totally depends on your business essentials and your campaign’s objectives, how should you measure marketing ROI?
Let’s take a look over these 4 steps to analyze and measure your marketing ROI:
Conversion Rate Analysis
If your digital marketing campaign’s objective is to convert visitors into leads or customers, analyzing and measuring conversion rates can help you decide if your campaign was successful. Monitoring conversion rates across various channels and device are essential, as this allows you to invest more in high-performing channels and devices.
Cost per Acquisition
Cost per acquisition is equal to the cost required to acquire a new customer. To find your cost per conversion, divide the total cost of your campaign by the total number of sales your campaign generated. It should not produce negative ROI; for that, you need to optimize your marketing campaigns so that the CPC is always less than the customer brings to the business.
Cost Per Lead
If you’re generating leads through marketing campaigns, you need to measure how much you are spending on each new lead or prospect. To find the cost per lead, divide the total cost of the campaign by the total number of leads generated by that campaign. If your cost per lead is higher than your cost after closing the deal, your ROI comes out negative, then, you must modify the process.
Customer Lifetime Value
The Customer Lifetime Value Index measures how much a customer spends over their lifetime. Seeing long-term benefits beyond the initial purchase gives you a more accurate ROI. If your customers have high lifetime value, you can afford to invest more in customer acquisition.
How to Improve Marketing ROI?
Specify Campaign Goals
When setting goals for your business, consider several factors that can influence your efforts to reach them. And while establishing objectives, follow an approach stated as, “SMART,” which shows that the goals are Specific, measurable, Achievable, Relevant, and Time-Bound.
Remember that marketing ROI depends on many factors, including, Cost structure, domain, market demand, etc. Therefore, clearly define the purpose of your marketing strategy when setting campaign goals.
Targeted Content Creation
In this digital era, where customers get hundreds and thousands of advertisements daily, your brand must stand out to succeed. No one wants to see traditional emails about sales, promotions, and new product launches constantly flooding their inboxes and social streams.
You must remember that customers want value and a personal connection with your brand. Therefore, you must ensure the content you will promote your services and product to the targeted audience with must be personalized. Once you identify your audience, you can create matching content. You can define the content creation approach based on your audience’s interests, demographics, location, gender, and more.
While drafting content, you should consider the below-mentioned points-
- Create Valuable Content
- Conduct regular surveys
- Make your content user-centric
- Influencer Marketing
Utilize Predictive Marketing Analytics
Marketing analytics is a powerful tool that facilitates organizations to measure and improve their marketing campaign’s ROI. It uses machine learning and artificial intelligence to extract insights generated by massive datasets, models, and algorithms to predict future customer behavior.
These gathered marketing analytics helps marketers identify and prioritize leads to determine the ideal customer base closest to conversion. Moreover, helps to improve retention efforts and increase conversion rates because marketers are better equipped with relevant information to understand customer needs.
Leverage Automation Technology
Marketers are increasingly looking for efficient marketing automation tools, that can perform simple, recurring tasks to reduce costs. Automated tools can perform repetitive tasks such as storing images and documents, managing mailing lists, and managing various other functions. With automation technology, you can focus on complex strategies, that require more creativity and effort.
Benefits of using Automation Technology:
- Increase sales by improving customer retention.
- Increase team accountability.
- Provide room for creativity and increase productivity.
- Target multiple channels with minimal effort.
- Help prospects save time by managing social media campaigns.
Avoid Vanity Metrics
Some metrics can be vanity metrics that can distract you from your business goals. Therefore, while measuring the progress of your campaign, you should be aware of the parameters you choose to track. The vanity metric diverts focus and effort from what is truly important and valuable.
Typical vanity metrics in marketing are press release shares, Facebook fans, raw page views, registered users, etc., and often don’t correlate with sales. These metrics provide insight into how a marketing strategy is performing but do not directly impact the ROI of marketing efforts.
However, there are some useful metrics that you should track, like CTR, engagement rates, reach, and more. By monitoring them, you can understand your campaigns’ performances and adjust accordingly to grow your brand further.
Conclusion
You can increase your ROI by experimenting with your marketing strategy often and avoiding distractions.
Remember to set clear goals for your marketing campaigns. That way, you can focus on achieving your goals.
You can also utilize Marketing Analytics to create content relevant to your audience.
Automate simple and repetitive tasks by leveraging automation tools and technology.
Finally, don’t spend only a little bit of time on vanity metrics when measuring campaign progress.
