There’s one simple question you can ask to measure the effectiveness of your marketing strategies. You might already be doing it. But we want to be sure you understand just how useful it is, why its useful, and what exactly you can accomplish with it.
The question is:
“How did you discover our product/brand?”
Obvious enough, right? Specifically, what you’re trying to find out is which marketing channels are delivering leads to your sales team. And you can go one step further than that: you can also find out which of your marketing channels are delivering your most valuable leads (ie, the ones you’re making the greatest profits from).
What this tells you is which of your marketing efforts are bringing in the most profits. You can then weigh that against the cost of each (see this article to learn about tracking Cost-per-lead), and determine cost effectiveness. This will show you where to invest your money when it comes to marketing.
To track this data, you need to:
1. define what qualifies as a lead
2. tally the leads coming through each channel over a given period of time
That might look something like this:
*WOM refers to Word-of-mouth. Yes, this is a form of marketing and it should be a big part of your marketing focus *PPC refers to Pay-per-click — those “search results” in Google that are above the organic results *SE refers to search engine, or what you can can call the “organic results”
Of course this only an example, so not all marketing mediums are included. You’ll just be tracking whatever it is you use. Notice that “website” is absent.
Leads coming to your site are either coming through PPC, SE or by navigating directly to your site. In the third option, they can only do this if they already know your web address, which means they heard about you through some form of marketing. So you’ll need to ask them. So, if they’re purchasing via your site, ask them on the sales form. If they say they were directed there by a sales team, then you know that data has already been tallied (by the sales team), so it doesn’t need to be tallied again. Otherwise, they’ll be checking one of the other boxes.
But all this table does is tell you which mediums are bringing in the most leads. To learn the whole story, you need a table with a little more detail:
|Top 20% sales|
In this version, you can track not just where your leads are coming from — but where your most valuable leads are coming from. You track how many leads are actually turning into sales, and thus you can track conversion rate.
The bottom row is for tracking your most valuable sales. You can use whatever measure you wish. Top 20% is just an example, chosen as a reference to the 80/20 rule (80% of your sales come from 20% of your customers). This will help you see which marketing channels most of your income is flowing through. You might find that it’s dispersed; you might find, conversely, that it’s heavily concentrated, and that some of your marketing channels aren’t offering a great return.
But there’s one more small problem: what if you ask your leads how they heard about you, and they offer multiple forms of marketing (like, say, they heard a radio commercial, then saw somebody wearing a branded T-shirt, then had a conversation that led to a referral?)
Here’s how you deal with that:
You add a 4th row for “impressions”. This is when your marketing makes an impression on somebody but doesn’t require them to act. When they have been exposed to multiple marketing forms, you have to make a decision about which one actually brought them there. The rest, you chalk up as impressions.
This gives you a better idea of what each marketing effort is actually doing for you. Impressions are certainly worth something, but are not as valuable as leads, let alone sales. Still, a few more impressions might help you decide between two strategies that are similar in the number of leads/sales they bring in. The value of an impression is hard to quantify, but you can safely assume that it is doing something to raise brand awareness — and to make the rest of your marketing more effective.