Measuring marketing ROI is essential, as it provides insights into the effectiveness of your marketing, which will tell you which part of your marketing funnel is working and potentially which part isn’t performing as well as it could.
Generally, KPIs are a forward-looking predictor of end performance, such as a sale. In contrast, ROI is a backwards-looking informer that examines how much it costs to acquire new business and helps to inform future budget allocation decisions. Measuring both KPIs and your ROI will save your business time, money, and resources to ensure you’re steering in the right direction.
Here are five metrics to track that will help you understand your ROI:
1. Customers Reached
Reach is the initial stage of the sales process where you create awareness for your brand. Every business will have different objectives and customer journeys, from the number of prospects you need to reach to the number of touch-points that result in a sale. For example, a low commitment sale (usually less expensive purchases) will likely have a higher percentage of sales to the number of people reached than products with high commitment (more expensive). Consider how much research is involved in buying a box of cereal vs. buying a car. The volume of customers reached is one KPI you should measure; this may be the number of people who saw a retail kiosk, viewed a TV advertisement, or clicked onto your website.
2. Signals of Interest
The first signal of interest in the digital world may be a webinar attended, it shows a signal of interest in the topic and/or business but has not yet converted to a sale. In the face-to-face world, the first signal of interest could be a customer that has approached an event stand and asked a question. A way to measure interest is the volume of interactions with your brand, which suggests they’re considering the product or service; this is one more touchpoint in the customer journey to closing a sale.
3. Volume of Sales
Sales are an obvious key performance indicator that must be measured to see where and when you are making the most sales and whether your marketing efforts are effective. However, aftercare and steps implemented to ensure customer retention and repeat purchases should also be measured and play a role in how the quality of the sale is measured.
Credico is a firm believer that you must know when, where, and who is making the sales. Once you know which teams are successful, they can teach what has been a successful strategy and what hasn’t. Not only will this ensure that all employees involved in the marketing and sales pipeline are educated with real-life data, but it also will likely improve sales across territories.
Additionally, tracking the actual customer data (in line with regulations like GDPR and CCPA) is a great way to learn who your target market truly are. This data will reinform your sales pipeline by giving you the demographics most likely to complete sales, thus increasing ROI.
5. Customer Satisfaction
Post-sale is where external and internal teams must work together to nurture the relationship with customers. This includes general customer service, relationship building, and other forms of marketing, ensuring that those customers stay loyal and feel appreciated by your brand. Placing importance on post-sale customer satisfaction will increase the likelihood of recurring revenue and additional purchases, and it’s easily measured. If a customer is returning, you know that they are delighted with your product/services.
Subscription services are slightly different, however. The cost of initial sale is low, so the metric for success tends to be how long the customer stays with you on a return subscription. The longer they stay the more they value the product/service.
Credico works with clients to improve their marketing and sales pipeline; they work closely with their clients to close the gaps between reach, consideration, sales, and post-sales. They reduce attrition and encourage longevity for their clients, ensuring that they focus on initial sales and recurring revenue, resulting in a higher rate of return.