Measuring marketing effectiveness is vital when it comes to understanding what’s working, what you should push more budget to, and what needs optimising. But with 37% of marketers stating generating high-quality leads is one of their biggest marketing challenges, there’s a clear issue at hand.
Every company has some form of marketing in place, even if it’s just a website. And while it’s important to know what works, some marketers don’t have time to sift through mountains of data to work it out.
If you can measure your marketing effectiveness, however, you’ll be able to answer questions like:
- Are my leads high-quality?
- Which channels and campaigns are driving qualified leads?
- Which paid channels, campaigns and keywords are working best to drive new high-quality leads?
- Will increasing my marketing budget be worth it?
While most marketing analytics tools give some basic indication of what’s working in your marketing arsenal, a lot of the data is missing and disconnected. And when just 23% of marketers are confident they’re reporting on the right KPIs, there’s a clear issue when it comes to measuring marketing effectiveness.
But don’t worry, that’s where we come in. We’re going to discuss:
- What marketing effectiveness means
- Why marketing effectiveness can be tricky to track but why it’s important
- What you need to start tracking to measure your marketing effectiveness
- How we can help take the hard work (and guesswork) out of your reporting
What does Marketing Effectiveness mean?
The first thing to understand when it comes to reporting on your marketing is what success in marketing is.
We look at marketing effectiveness as, “‘marketing’s ability to create high-value leads that result in sales”.
It really is a simple as that. So how can you understand how marketing impacts your bottom line? Let’s find out.
Importance of Measuring Marketing Effectiveness
There’s no doubting that measuring your marketing effectiveness is important. By understanding what’s working and what isn’t, you can:
Optimise your outputs
With visibility on what is working and what’s not, you can spend time on what you know is working well and doing more of it.
Similarly, you can begin to learn what aspects of your marketing strategy need work.
Optimise your budget
Alongside optimising your time is optimising your budget. A marketing budget is tricky to get sign off on at the best of times. But, with the right reporting tools in place, you can quickly identify which areas are driving high leads and high revenue. This makes asking for more budget a breeze.
Plus, it gives you room to explore new initiatives too. Given you can quickly see the impact of your marketing efforts, you’ll be able to try new channels and campaigns and see if they’re having the appropriate impact.
Increase your bottom line
With the data you need at your fingertips, you can work on driving more high-quality leads and sales. With that, you’ll be able to create a marketing machine that can consistently drive revenue.
And you know what that means? A healthy influx of sales will help you grow and expand your team, your budget and your impact.
Difficulty Tracking Marketing Effectiveness
Measuring your marketing effectiveness shouldn’t be difficult, and yet, 40% of marketers stated that more accurate data would improve their marketing outputs. So what’s going on?
We’ve got difficulty measuring marketing effectiveness down to these key reasons:
Lack of eCommerce
Not every marketer has the luxury of an eCommerce business where revenue can be tied up into Google Analytics.
High-value eCommerce and B2B often have to drive leads through their websites, not sales. These leads are often comparing lots of different products and solutions, or need to get sign-off for big-budget tools or products. This results in leads sat in your pipeline for longer and more nurturing via more channels to get them over the line.
What comes with this is conversion types like form fills, phone calls and live chat. Each of these has its own issues. The first is difficulty track them. The second is difficulty attributing them back to a marketing channel. And third is understanding if that lead progresses into a sale.
Long Customer Journeys
Users don’t click on your website and convert right away. Customer journeys are getting longer and longer. With that comes more and more data for you to track.
And while you’re probably already struggling to track conversions, how do you even begin to understand these as part of a full customer journey?
Your data is disconnected between your website, your CRM and your analytics tools. But it’s not impossible to reconnect them.
With all of these leads, channels, campaigns and touchpoints to track, there’s no doubt you’re feeling data fatigue. Where do you begin when it comes to looking at your data and understanding what data is important, and what isn’t?
Measuring Marketing Effectiveness: What to Track
So now we know what marketing effectiveness is, why it’s important and also why it’s difficult to get right, let’s break down how to get the data you need and track the right metrics.
We mentioned it earlier but all the data you need is out there, it’s just disconnected.
You have engagement and lead information on your website, sales information in your CRM and some basic marketing insights in your analytics tools.
What you need to do is create a simple flow from website to CRM and your analytics. That’s where we come in.
Apply Attribution to your Data
Ruler Analytics is a marketing attribution tool. All that means is it acts as a go-between your most important tools, collecting and sending relevant data between your apps.
What does it do?
Well, it’s simple.
It tracks every lead, every conversion and every touchpoint. So when a lead comes in through a form fill, live chat session or phone call, Ruler will have all their previous interactions on your website and the referring channels, campaigns and keywords.
Ruler will fire that info over to your CRM. Then, when they convert into a sale, Ruler will scrape the revenue attributed to that user and fire it back to all your analytics tools.
So which metrics can you accurately (and automatically) measure your marketing effectiveness with thanks to Ruler?
Let’s explore the best metrics to track your effectiveness.
Metrics to Track your Marketing Effectiveness
Vanity metrics are great, but they’re not going to tell you much about your marketing’s impact. They’re great at highlighting the potential of your marketing, but that’s about it. How much does a follow on social really mean if that follower doesn’t convert into revenue?
Return on Investment
This is the big one. The best way to measure your marketing is by how much return you get on your investment.
With Ruler, you can see your cost per channel and campaign and see a direct figure on return.
And remember, since we integrate with analytics tools like Google Ads and Google Analytics, you’ll also be able to see these figures accurately in those platforms too. But with Ruler, you’ll be able to switch between attribution models to properly understand the roles channels play in driving revenue and leads.
Cost per Sale
As well as ROI is cost per sale or the amount you paid for each sale created. This is a great stat to use when measuring your marketing as it allows you to pinpoint how much went into individual channels.
And remember, in Ruler, we break it down by channel and campaign too. So, you’ll be able to compare your cost per sale figure on Google Paid compared to Bing Paid and be able to come to your own conclusions on which is working best.
Cost per Lead
Similarly to cost per sale is cost per lead. This is another great metric to use when it comes to measuring your marketing. However, it does have its limitations.
When used without a tool like Ruler, it’s highly unreliable. Firstly, are you even sure you’re accurately tracking all of your conversions? Phone calls and live chat tend to rely on marketing attribution tools. It’s possible to track form fills using Google Tag Manager and Google Analytics, but it only gives you lead volume. You won’t be able to see which channels encouraged that new lead.
Lead value is a great metric for a range of businesses. It’s a hard number that ties your marketing to potential sales.
It allows you to understand if your marketing is driving:
- Low-quality leads that don’t convert
- Low volume of leads
- Leads interested in low-cost products or services
- Leads that are less likely to become repeat or long-term customers
With this knowledge, you’ll be able to focus on your marketing efforts that are driving high-quantity, high-quality and high-cost leads.
Customer Lifetime Value
Customer lifetime value is very similar to lead value but it focuses on how much revenue one customer can potentially provide over the lifetime. Salespeople tend to focus on this metric as it means more commission for them. But it’s important for marketers to.
If you can work out which marketing initiatives are driving long-term or repeat customers then that means repeated, reliable revenue for your business.
Start Measuring your Marketing Effectiveness
Hopefully, you’ve learned a little more about marketing effectiveness and the metrics you need to get started with it.
But remember, to get the most out of your marketing you need one single source of truth that will allow you to quickly and decisively make data-driven decisions.
Ruler Analytics is the missing piece when it comes to reconnecting all your marketing, leads and sales data so you can confidently understand where to concentrate your efforts.
Learn more about marketing attribution or see the data in action for yourself by booking a demo with our team.