Editor's Note: Today's post comes courtesy of Daniel Newman, President of Broadsuite, a company dedicated to helping companies be found, seen, and heard online by tying together paid, owner, and earned media to drive meaningful business outcomes. Newman is the author of 3 Amazon Best-Selling Books, “Evolve, Marketing (^as we know it is Doomed), “The New Rules of Customer Engagement,” and “The Millennial CEO.” He is a regular contributor to Forbes, Entrepreneur, and Huffington Post, a global keynote speaker, as well as an adjunct professor and advisor to some of the world’s largest brands.
What is that one thing that has the focus of every marketer? ROI – the magic word for any company that invests in marketing. However, time and again, it has been proven that ROI is not easy to find. In a business world that’s largely driven by returns, it has become increasingly necessary for businesses to be able to measure ROI, and the good news is: we have the ability to do it. Today, with the use of landing pages, custom links, inbound programs, SEO, and social media nearly everything has the ability to be measured and tracked.
Once tracking and measurement is underway, the data received must be placed against the marketing goals. Are the goals “audience building” and “awareness” or are they “clicks,” “engagement,” and “purchases?” Whatever your goals, do you know how to build a program that can measure these things? Let’s find out.
What is measurable ROI and unmeasurable ROI?
In one of my previous articles, I talked briefly about a measurable ROI. I had explained ROI in terms of X and Y, where X stands for the amount of dollars spent and Y stands for the number of new customers attracted. The relationship between X and Y is directly proportional, that is, the more dollars you spend, the more new customers you make. This is the ideal situation, but we can’t always replicate it in real life, at least not on a regular basis. For example, expecting that every single dollar you invest in a new marketing automation system will come back to you would not be very realistic. Still, we can gather ROI information by looking at this measureable equation, in part. The other part of the equation involves ROI that is not measureable in such straightforward terms.
Marketing outcomes should be measured in two stages to fully determine ROI. The measurable data yields part of the marketing campaign’s ROI, but what about the part that’s not measurable? What does that entail? It involves creating customer awareness, creating brand advocates, and building the community that drives earned engagement to the campaigns. So, in a way both stages are interconnected and they need to both be looked at in order to fully understand ROI. Unfortunately, only one part is clearly measurable while the other is not.
Data that drives your marketing
Data is and should be the driving force behind your marketing efforts. That data can come from many sources and can be extracted from relevant big data, or by measuring customer engagement through omni-channels. When you get to know what drives your customers to engage with your brand, you are better able to predict a successful marketing strategy, even in today’s business world where things are changing overnight. 1:1 direct marketing comes close to evaluating the customer interest and the subsequent number of customers responding to your campaigns. Even so, it’s still difficult to directly connect the creation of a new customer or any return purchase by an existing customer with any specific campaign.
Perhaps you can move closer to tracking that evasive thing we call ROI by focusing on data-driven marketing that will help you gauge the level of customer engagement that your brand is able to create. With more data available to you, ROI becomes much more apparent.
How are you measuring the ROI of your marketing initiatives? Do you feel as though you have a handle on it or are you struggling to figure out how to measure what really matters?
For more strategies on how to leverage the data in your marketing arsenal, download the Modern Marketing Essentials Guide to Data Management.