Being able to measure your ROI for all of your marketing efforts is vital.
If you’re an agency, not only can you show proof to your clients that what you do is creating real bottom line results for them, but you have the ability to see what isn’t working so you can refine your client strategy for an even better outcome.
If you’re a business, you can adjust your marketing strategy to fit your results if only you know what they are and where you are having the most success.
We’ve come a long way in terms of analytics and insights into what works in marketing, so many companies still either don’t measure their ROI at all, or think it’s too hard to do.
So, with all the technology and software available out there, why is marketing return on investment so difficult to measure?
Intangibles of Marketing Measurement
Part of the problem with measuring ROI is that there can be so many intangible gains from marketing that don’t necessarily add obvious pounds to your bottom line.
You can establish your expertise in your niche, increase your brand awareness, increase your customer satisfaction, build a community and so much more with the right marketing, but it’s incredibly difficult to put a monetary amount on those things and decide what they mean in terms of actual profits.
There’s also still some argument between marketers about whether your ROI calculation ought to simply be Revenue minus Marketing Costs or whether you should look at Gross Profit instead, where you do account for your overheads, cost of providing your goods or services and your operating expenses.
If there’s still a discussion going on between different marketers about how to even calculate ROI, it’s highly unlikely there’ll soon be a single definition to use that satisfies everyone.
Tracking Leads Through The Whole Buyer’s Journey
Then we come to the question of where your leads actually come from?
One person might find you on Facebook, someone else may pick up a leaflet at a live event, yet another lead may come to you via word of mouth.
It’s also likely that many of your leads will have found your website via multiple touch points, so it can be difficult – especially if you’re attempting to calculate all this manually with a spreadsheet – to assign the right values to the right channels.
Not only that, but so many things happen that can be outside the scope of many tracking tools.
How do you track those people who took your business card at a networking event or took a leaflet from you at an exhibition you did?
What about live chat enquiries or phone calls – how do you find out how your leads found you and what path they took before you’ve spoken to them?
Google Analytics is very good up to a point, but it can’t even begin to track your phone calls or live chat activity, and certainly not your in-person events.
Many B2B marketers don’t measure the actual ROI of their campaigns in terms of the lifetime value of their customers, and to me, that’s a mistake.
We all know it’s far cheaper to retain a loyal customer than it is to acquire a new one. In fact, according to a survey produced by Econsultancy, 70% of companies say that it’s cheaper to retain a customer than acquire one.
Do you really know how much revenue each customer brings in over their lifetime and do you even know how to measure it?
The problem is, with something like Google Analytics eCommerce it’s only possible to track and measure revenue.
All of that sounds pretty bleak, doesn’t it?
At this point, you could be forgiven for thinking you might as well close up shop and go home if you can’t measure so many things that are vital for marketing success.
But don’t worry.
We’re not going to leave you hanging and worrying about how on earth you’ll present your clients or board of directors with clear proof of their return on investment.
Not without providing you with a solution that works.
Introducing Closed-Loop Revenue Attribution
The Closed-loop Revenue Attribution framework is an approach to marketing measurement that instead of relying on existing metrics such as goals and conversions, focuses on what matters the most to your business: revenue.
How does it work?
Using a visitor level product such as Ruler Analytics you can track anonymous people over multiple sessions, sources and keywords.
When a lead/sale converts, whether that be via phone call, form or live enquiry, Ruler Analytics will integrate and send this data to your CRM, Google Analytics and other web applications.
Once the deal or sale closes into revenue, Ruler Analytics passes this information back to your marketing analytics to report real sales and revenue.
This diagram below demonstrates the process.
It’s this framework that simplifies the process when it comes to calculating the ROI of your marketing efforts.
We have an eBook that explains this framework in much more detail which you can download here.
Using a software like Ruler Analytics can map your entire customer journey for you, giving you a clear view of how each customer found, what made them decide to buy, how they got in touch and their value to the business.
You’ll be able to keep an eye on the full lifetime value of each customer and compare it with the cost of getting them into your sales funnel.
You can combine data from both sales and marketing, getting the right information from both departments to prove where your leads came from and what marketing efforts brought them in.
Giving you a clear picture of your actual ROI from your marketing and what really works.
Now you know how to get your data and ensure you measure your results and your ROI, it’s down to you to decide what you need to measure for your company and how you want to do it.
While other marketers may have opinions on what the calculation should be, you’re the one that knows your company inside out and knows what matters to you.
Focus on that and with the help of Ruler Analytics, you’ll be able to prove real world, bottom-line results and continually refine and improve your marketing strategy.