Mastering Marketing ROI: Essential Strategies for Small Business Owners
Dive into the world of Marketing Return on Investment (ROI) and discover why it's a game-changer for small businesses. From setting clear marketing goals to tracking Key Performance Indicators (KPIs) and adapting to data-driven insights, learn how to measure, track, and explain your ROI for a thriving business.
If your small business has the option for a marketing department, that’s great! If you don’t have the funds for a marketing strategist just yet, use this article to make sense of your own ROI analytics.
Why Measuring ROI Is So Tough
Posing the question is generally the easiest part, right? When it comes to measuring ROI, the difficulty is attributed to the many elements that could shift the data.
Investments made today could affect business one week from now—or two years from now. Determination is nearly impossible.
You may have also heard that seven “touches” are needed before a cold lead turns into a sale. Since every small business owner knows this number can vary, it can be hard to assign a certain value to each “touch.”
When a high school student visits a college campus, weather affects his or her impression of the school itself. This first impression, whether the sun was shining or not, has nothing to do with the school itself, and yet, it plays whole-heartedly into the deciding student’s decision.
The same thing happens in business. Extraneous factors like weather, macro-economic trends, and employee impression, can also affect ROI.
What Counts When Determining ROI?
Marketing efforts are “working” when marketing supports your business goals. Here are some common marketing goals and their correlating ways to measure their effectiveness:
Brand awareness: website traffic, page views, video views, document views, downloads, social chatter, and referral links
Engagement: blog comments, Likes, shares, tweets, pins, Forwards, Inbound links
Lead generation: From completions or downloads, email subscriptions, blog subscriptions, conversion rate
Sales: online sales, offline sales, manual reporting
Customer retention/loyalty: Percentage of content consumed by existing customers, retention/renewal rates
Up-sell/cross-sell: Sales for new products/services
Keep these in mind as you work through this process of determining ROI.
Set a marketing goal
You can’t be sure you’ve arrived if you’re dealing with non-specifics. If you have more than one marketing goal, try prioritizing which one matters most.
Make sure the whole team (if that’s nine of you or only one other person) are on the same page. Working towards the same goal as one makes more sense than two people gunning for separate goals.
Track key performance indicators (KPIs)
Key performance indicators are measurement tools for businesses that gauge how successful projects and overall business models are. Settling on KPIs is the best way to determine which numbers most align with your own overall business objectives. Think of KPIs as guideposts. KPIs help direct focus.
The science of gathering data
Gathering performance data and measuring ROI can be as intense or as free-flowing as you’d like. And don’t just gather numbers for numbers sake. Your gathered data should be able to support these two questions:
Do these metrics support my overall goals and business aims?
Can I use this data and take action on these metrics?
Ultimately, you’ll want to answer affirmatively for both of these questions. ROI data is most useful when it can both provide insight and improve your current business strategy.
For example, if you’re aiming to up your subscribers for your business email newsletter, you’ll want to know just where subscribers do come from and what topic interested them enough to encourage their enrollment.
If your business is hoping to keep subscriptions at a certain level of commitment, measuring and researching why subscribers decide to opt-out will also play into the equation.
Who will be responsible for collecting and reporting data?
If there is more than one person on your staff, everyone may think that gathering ROI data is a task that belongs to someone else. Be clear and specific of who is in charge of this crucial data.
Using a shared platform, like Google or Slack, so your entire enterprise will have access to the most up-to-date stats and facts can make the most sense.
Make the measurements
Vanity tracking, like tallying up Twitter and Instagram followers and Facebook Likes matters, but it also doesn’t.
These numbers are easy to track, and hopefully will continue on a positive trajectory, but alone, these numbers aren’t helpful on how ROI works.
It’s more important to make considerations of what drives interest. What posts receive the most engagement? What’s the tone? What’s the topic? Confidently knowing what your target audience responds too will make sure you’re delivering on reading interests and expectations. Which will help your bottom line. ROI tracking is all about collecting metrics that you can take action on.
Adapt and analyze
What you track over time will shift, and so will the data. Review metrics on a quarterly basis and make adjustments as needed.
Having a master spreadsheet with collected ROI numbers from month after month is great, but as a whole, how beneficial is that? Ensure you’re making time to actually run a full-on analysis. Whether that’s a sit-down meeting with the marketing team or a casual assessment yourself, don’t forget this step.