Measuring marketing ROI can be a confusing and often frustrating process, especially for inbound marketing agencies whose strategies and tactics are not as tangible and easy-to-see. As 2016 comes to a close and it’s time to set goals for 2017, it’s essential to measure your marketing ROI to hone in on your new targets and goals before the new year. ROI performance is graded by achieving sales goals, and you’ll need reliable metrics for every marketing tactic or effort to see how they support your sales goals.
If you’re building a marketing plan and you can’t forecast your plan’s potential ROI in dollars, then there’s no reason for the decision makers in your company to approve a given budget. It’s time to dive deep into all of the numbers and deliver your boss the metrics that they will care about. Inbound marketing not only offers the metrics that you need to keep your boss (and everyone in the company) in a jolly mood this holiday season, but its strategy will also help you set benchmarks, goals, forecast a marketing plan and budget for the new year. Here are some methods to consider when measuring marketing ROI:
1. Build a plan based on your revenue needs
The most effective way to start to think about your goals and building a marketing plan that meets these goals is to attach numbers to it. For instance, you might make it a goal to increase your leads by 10% each month. Whatever the goal is, attaching a number to it makes the goal easier to understand and gives you something to measure performance off of, whether you miss, meet or exceed that goal. Calculating these numbers requires historical sales data and goals that are realistic for your company’s size and budget. Keep in mind that a lot of the leads you will generate will not be qualified, so adjust your numbers to reflect the amount of qualified leads you received per month in 2016 so that you can accurately and realistically set goals for the same metrics in 2017.
2. Identify the most important numbers
Begin with the most critical numbers, the ones in which you’ve invested a significant amount of time, money, energy, and other resources into. Some important metrics of your inbound marketing strategy to consider; lead generation metrics from content marketing, organic visitors that land on your site, the amount of people who traveled through every stage of the funnel to generate a sale, etc.
Another idea is to calculate the ROI of your competitors’ inbound marketing efforts. Look at what they’re doing well and their metrics in areas such as social media or engagement on their blog, and set goals for your own efforts. Careful, don’t spend too much time obsessing over what everyone else is doing. Competitors’ successes and failures act as a good benchmark or launch pad for your own inbound marketing efforts, but just keep in mind that the goal is to stand out from them, not replicate them.
3. Why it’s important to look at the data for the entirety of 2016 and not just a couple months
According to HubSpot, 85% of businesses that are using inbound marketing see traffic increases within 7 months, which means a week’s worth of data from your new blogging campaign won’t tell you much about marketing ROI. It’s important to look at trends over the entire year to figure out what worked and what didn’t to accurately plan for the next strategy. Some tactics are better measured year over year to see seasonal trends and other tactics are better evaluated month over month. Either way, examining trends over a longer period of time will help tell a better story of what happened with your online assets so that you can better plan for a long-term strategy for the same tactics.
4. Implement closed-loop reporting
Closed-loop reporting is an aspect of inbound marketing strategies that ensures every step of the conversion process is not only documented, but shared between departments within a company. In other words, closed-loop reporting is tying the knot between marketing and sales so you know exactly how each department feeds into the other. Without closed-loop reporting, your marketing team won’t know which of their efforts resulted in sales revenue and can’t analyze the steps they took to help the sales team close the deal. Closed-loop reporting takes practice to get a successful system going between your sales and marketing departments, but it’s a process you won’t regret implementing into your inbound marketing strategy for 2017.
We know that calculating ROI isn’t the most glamorous or exciting thing on your to-do list this holiday season, but we hope that you now see the value and importance of it when outlining your goals for 2017. If you need help with the ROI calculation process or how to use your results to create goals for the new year, please contact us!
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