Is your marketing working? Here’s how to find out – Marketing Magic Tip
8th October 2018
in Advice, Articles, Blog, Business tips, Entrepreneurs, Marketing, Marketing evaluation, Sales, Small Business, Social media marketing, Startups
Is your marketing working? Here’s how to find out – Marketing Magic Tip
In today’s digital marketplace, the number and range of options that are open to consumers to find products and services are snowballing. The greater competition means businesses must work even harder to stand out from the crowd so they can become the provider of choice in the minds of their clients. Whether your business is an established million pound giant or you are a fledgeling startup, and no matter what products or services you sell, it is imperative to attract potential buyers to your business continuously, otherwise you will not be able to generate revenue and ultimately risk failing in the long run.
This is where marketing comes in! Marketing should aim to effectively help your company to do the ‘know, like and trust’ thing that leads to doing business with you. Marketing should attract, engage and nurture people into qualified leads to whom you can sell. Furthermore, marketing should enable your enterprise to engage and nurture existing clients through upselling, cross-selling and repeat purchases to sell more. Marketing should be a key part of every business’ plan. However, research shows that a shocking 34% of startups do not have a marketing plan.
Businesses often spend good money on marketing campaigns, whether in-house or outsourced to agencies, and expect transformative results. It is shocking that research shows that many as 50 per cent of businesses say that their marketing is not working effectively. They do not believe marketing is getting the results they want or had planned. Here we address this thorny issue of ‘how to establish if a company’s marketing activities are worthwhile for your business’. Knowing which of your techniques are working provides a solid foundation to leverage marketing by investing in more of the right things while turning off or reducing your spend on the activities that are wasting your hard-earned budget
Marketing spend per year
According to the CMO Survey, marketing budgets now comprise 11 per cent of total company budgets on average. As the following graph shows, there is a wide variation between industry sectors in the proportion of revenue allocated to marketing.
Another point worth noting about marketing spend is that companies that view marketing as the primary driver for leading revenue growth (38.4 per cent of the sample), tend to allocate a larger share of their revenue to marketing (14.5 per cent)
Companies spend money on marketing because it is key to their bottom line. The amount of money that businesses initially spends can differ according to a range of different factors which include, the business type, growth goals and the amount of revenue you generate. It is logical to conclude that the less you spend on marketing, the lower your belief that it can bring a return on investment. However, it is worth asking: does more marketing spend always lead to guaranteed results?
How businesses measure marketing performance?
Businesses today, are faced with an ever-increasing range of marketing strategies from digital to traditional techniques. For many, the decision to use new technologies like Instagram or WhatsApp can feel like a shot in the dark. As we have touched on briefly, the definition of success for marketing isn’t necessarily tied to your revenues, though it may be dependent on achieving other, smaller objectives. Furthermore, marketing performance can be interpreted in different ways, as the same marketing plan that works great for you may not work for someone else. The key is to look at the numbers that marketing is contributing towards your goals because your spending and marketing activities can only be viewed at objectively in a numbers game.
Despite there being “no shortage of data for each action you take in your marketing campaigns, nor is there a lack of tools to help you measure them”, the reality is that many businesses, perhaps led down the wrong path by marketers, tend to look at the wrong numbers. You see, some performance metrics aren’t as crucial as they seem – they are Vanity Metrics that you should avoid. Hubspot states that Vanity metrics include data such as social media followers, page views, subscribers, and other flashy analytics that are satisfying on paper but don’t move the needle for your business goals. They offer positive reporting, but no context for future marketing decisions—something actionable metrics can do. As a marketer, I can tell you that it is all too easy to provide reports with numbers and attractive graphs showing things like numbers of website visitors, new followers on social media and even numbers for people engaging on social media which people are often happy to see. While some of these numbers are potentially useful as indicators of progress, you should not depend on them as your marketing yardsticks.
Better ways to evaluate your marketing
I remember a close friend sitting me down a couple of years ago to give me his considered advice about how to get more customers. He told me “Don’t say you provide Leads anymore. Just offer to do a few social media posts for people and charge them peanuts. You will get a lot more clients that way” I thought for a second and then responded that “The thing that sets us aside from other marketers is the fact that we are driven to generate sales for clients. Companies need Lead Generation that our online marketing can provide. They will soon stop seeing the value of our services in any case unless we create more business, no matter how low our charges.
I am glad I stuck to my vision because at Global.Media, clients come to us wanting a range of different outcomes for their companies. For example, some only want to gain more followers to other wanting to win more interaction by using social media – We charge these clients lower prices. As a marketing agency, we take a laser-focus on our campaigns impacting the bottom line – for which we charge our ‘normal prices’. Our marketing needs to bring you prospects that we can sell to – Lead Generation – that is always the primary goal for us. Generating fans, likes, awareness and engagement are useful as it helps to lead to requiring enquiries which lead to sales. However if marketing is not bringing you, customers, then it is not working, regardless of the amount of time, you throw at it.
My message today is that businesses must take more care of their marketing spend to ensure they are getting a good return on investment. The best way to analyse marketing performance is to focus on Key Performance Indicators (KPIs) You should agree these before launching any marketing activity and write it into your marketing plan. KPIs provide a staged-measurement approach to the pertinent numbers that influence your business revenue. They also offer a platform to build on small achievements all the way to actionable metrics – things you can address to improve on over time so that your returns become increasingly more valuable to your company. Here is how it works.
Set metrics for the five key performance areas that marketing activities impact (and for which you should collect data):
1. Activity metrics – marketing activities that show progress towards your marketing goals. Examples
• Number of posts per day/week/month
• Response rate to enquiries
• Number of website visitors/fans & engagement
• Number of subscribers
2. Goal metrics – the desired destination marketing should take you to; how much do you want in return? Examples
• Number of leads generated
• Revenue generated from prospects
3. Funnel metrics – the costs acquired at each stage of the marketing funnel. Example
• Cost per lead
• Cost per channel
• Cost per sale
4. Conversion metrics – the rates at which people marketing attracts become Leads. Example
• Reach to enquiry ratio
• Website visitors to leads ratio
• Leads to conversion ratio
5. Database metrics – the extent to which clients on your books generate business. Examples
• Repeat purchase rate/amount
• Referral rates
Any activity that involves spending your enterprise’s hard-earned budget deserves close attention, and marketing is no exception. The challenge is to be strategic and devise a clear marketing strategy that sets out the goals (KPIs), activities and responsibilities in your marketing campaign. A properly-documented plan will support the collection and analysis of the right data. The aim of the marketing plan should be to gather numbers that will help your business to know about past performance as well as plan strategies for getting even more/better returns from your marketing going forward. You may want to speak with an experienced marketing consultant like ourselves for help with devising your plan and evaluation approach.
Global.Media provides expert online and offline advertising, and marketing on all digital platforms to get qualified leads for businesses. Check out our Services page to see how our advertising and marketing services can help your business to get more customers and sell more, faster. Why not sign up for our newsletter using the simple form on the right? You can also follow us on social networks. Finally, we’d love for you to share this post with your network using the share buttons below.
We’d love to have your feedback and suggestions about this post. What are you doing to monitor your marketing activities? Which performance indicators have proved most effective for your company? Please leave your comments in the Comments Section below.
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31st March 2019
31st March 2019