You’re a marketing leader. Maybe you’re juggling teams of specialists focused on semi-siloed marketing programs. Or perhaps you’re the bandwidth-strapped ‘jack of all trades’ marketer operating as a department of one. Either way, you work hard to bring revenue to your business and help your company grow. But communicating the impact of those efforts is unfortunately neither easy, nor clear.
Sound familiar? We get it.
Marketing teams consistently struggle to fully and accurately demonstrate the impact of their efforts on company revenue. In the era of digital marketing, availability of data is no issue — in fact there’s often too much! But deciding what to present and how to present data in a way that will resonate with your executive team is where the real challenge lies.
What brought that customer your way? Was it a LinkedIn post, a white paper, or a Google ad? It was probably all of those. According to Gartner, B2B companies have an average of 24 interactions with a potential customer from inquiry to conversion – and that’s just starting from the inquiry. How do you account for – and give credit to – all the smaller interactions that occur before a customer reaches out?
Imagine you are a Marketing Director in an ecommerce business and you don’t have visibility into how awareness-level marketing activities impact your sales funnel and bottom line.
A few years ago, we had an ecommerce client running a brand awareness campaign on Facebook before the platform rolled out their robust product campaign features. The exposure they had from this campaign helped to fuel other, successful paid search campaigns closer to the point of purchase.
However, they did not realize how much of an impact this top-of-the-funnel campaign had on sales because their tracking was not yet set up properly. Counter to our advice, this client shut off the Facebook campaign which dried up their lead flow. In one fell swoop, they obliterated their marketing funnel because they didn’t have the data to show how that awareness campaign drove business outcomes.
You don’t have to meet the same fate.
What is Marketing ROI?
Marketing ROI is a way to measure how much your marketing contributes to your company’s profits. You can calculate marketing ROI by subtracting marketing costs from sales growth, divided by the marketing spend.
Marketing ROI = ((Gross Revenue – Marketing Spend) / Marketing Spend)
While it’s tempting to use net revenue as part of your calculation, focus on using gross revenue because there are too many other cost variables (like rent, salaries, etc.) that contribute to net revenue.
Knowing your marketing ROI will bring you clarity in your actions and the confidence to make smart decisions about your marketing spend.
Connect Marketing Data to the Rest of the Business
If you want to unlock true insights into how your marketing affects your company’s revenue and what you can do to drive even more sales, you have to tie your data to the data of other areas of your business. This connection is the technical foundation of your marketing ROI, so it’s important to know what data should be connected, and how it should be leveraged to make investment decisions
Sales and operations are the two key areas you should focus on. To read more detail on connecting marketing data to the rest of your business, download our free how-to guide.
Integration that Moved the Needle
Long Roofing benefited from integrating their marketing data with both sales and operations, creating a targeted content and digital strategy that generated not just click-throughs and conversions, but resulted in a marketing platform that can be optimized based on the performance of sales and call center teams. The data integration and campaigns were so cohesive that the company was able to throttle back their efforts when leads overwhelmed their call center. The tight integration of all their platforms allows them to adjust the levers of their marketing ROI as needed. Read the full case story here.
Measure Marketing ROI on the Right Scale
Accuracy is important in calculating marketing ROI. Once you use the right data – connected with other key areas of your business – to measure it, you’ll have a much clearer picture of how marketing affects revenue.
A healthy view comes from synthesizing short-term and long-term return – a relationship that will vary based on the goals of your business and your market maturity.
If you’re selling a commodity product or service, short-term marketing ROI data might drive more of your decisions as you harvest a mature or declining market. Focus on attribution of techniques, tactics and channels. Short-term return calculations work well to measure performance of specific campaigns.
With a product or service that requires more buyer education (and thus more touches), you’ll want to weigh your calculations more toward long-term marketing ROI. Focus on the impact of branding and messaging, as long-term calculations measure brand performance over longer time horizons.
Your Data is Only as Good as What You Do with It
You can talk click-throughs and views all day, but your revenue depends on you being able to not just track but measure and assign real value to your metrics. You have the data. It’s time to bring it together and act – so you can get the results your leadership demands.
Knowing your marketing ROI will help you hold tight to your marketing budget and help others in your business see the impact you and your team bring to the table.
How Silverback Strategies Can Help
Silverback Strategies gives marketing leaders the confidence and clarity to accelerate campaign performance and prove revenue impact so they can do more of what works and lose what doesn’t.
We offer an integrated team of experts and practitioners across Analytics, Content, Creative, Paid Media, Research and SEO to customize unique campaigns and revenue attribution models. Here are two examples of how Silverback can help you measure marketing ROI:
- Infrastructure for marketing data integration — Our expert Analytics team examines your current Web Analytics Tracking and CRM connectivity. Armed with these insights, we provide guidance to augment your data collection & quality standards. This will give you confidence in knowing accurate marketing data is connected to the rest of your business.
- Centralized marketing dashboards & executive data reviews — Using the latest innovations in data visualization, our teams create customized reports and dashboards tailored to what matters most to you and your C-suite. We then review the latest insights with you and your C-suite so that you can quickly act on defining trends for your business.
Our dedicated account managers work side-by-side with you to maximize your marketing efforts, coordinate across resources, and get value out of every dollar you spend.
Ready to go? Request a consultation today.