Seeing the wood for the trees in your data
Measuring the return on your digital marketing investment can sometimes seem daunting and confusing for small business owners.
Without being specially trained in analytics tools such as Google Analytics, Facebook or a CRM, it can be difficult to see the wood for the trees in your data. Digital marketing is especially bad at that as there is a huge amount of potential data available to you.
It’s great to have access to that much intelligence to help grow your business. But it can also make it hard to spot the nuggets of insight which will actually create the step change in your marketing, and consequently your business.
In addition to the wealth of information available to you, often business owners are more focused on the sales side, asking how many people purchased through each sales channel, but that might not be the right metric to measure and miss out on the opportunities for improvements.
We are going to dive into how to measure the effectiveness of your digital marketing campaign. This will help you make smarter and better decisions about your marketing as a business owner, as well as giving you the insights needed to make better business decisions too.
Setting the right goals linked to your business
The first place to start when trying to measure your return on investment is understanding what business goals you are trying to achieve.
These goals should be aligned to areas in the marketing funnel, focusing on particular goals you want to achieve growth in for your business.
More often than not it will be a revenue figure, but it could also be goals such as awareness for a new product/service, or building your database of relevant contacts.
It’s easy to start measuring what we call ‘vanity’ metrics. Things that may look good and shiny in a report or presentation but don’t actually make a positive impact on your business. Make sure you stay focused on the business goal and measure. Your marketing strategy is there to deliver on your business goals, so the two should be aligned on the main metrics of success.
Attribute marketing performance to an appropriate metric
Most marketing investment is used with the aim of generating revenue but a lot of marketing activities don’t necessarily directly lead to a sale. There are multiple steps in between someone first becoming aware of a business, brand, product or service and making that purchase.
It’s important to look at the overall revenue number of course, but you also need to establish the goals and key performance indicators (KPI) in between that first interaction and the purchase, and ensure you are linking the KPI up with the right marketing activity.
For example, there is little point in measuring lead generation marketing activity by sales alone, because there will have been a sales process in between which will have impacted and influenced whether you got that final sale or not. A more appropriate KPI might be something like the volume and quality of the leads generated. Whether that lead converts, is then a KPI relating to other marketing and sales activity in your process.
If you don’t attribute the right goal to the right activity, you could end up investing in something that isn’t actually as effective as you think it is, or worse still change something that wasn’t broken!
Understanding that different activities will provide a different kind of return, will help you get the best from your money.
If your campaign does not get the result you expected, it doesn’t mean that that tactic doesn’t work for your business full stop.
We hear a lot of businesses say that “social media doesn’t work for us” or “Google advertising was a waste of time and money” or “no-one responded to the flyers we sent so we won’t bother doing that again”.
But the problem is not that social media doesn’t work. It’s that that particular content posted at that particular time, to that particular audience, didn’t resonate or generate engagement.
There can be multiple reasons why something doesn’t provide the results you expected. This could be due to something outside of your control such as market trends (or a pandemic!), a lack of planning e.g. a specific target market message was sent to a general audience, or something that simply needs to be tested and learnt from e.g. subject lines in an email or type of imagery used in an advert.
Although it’s important to react quickly, some patience is also needed to make sure you aren’t throwing the baby out with the bathwater!
Continually monitor and review
When you reach that serene place of being confident your marketing is optimised and performing at its best, the greatest mistake you can make is resting on your laurels. Your target audience will get tired of similar communications being directed to them again and again, so some change is going to be needed.
Additionally, the world of marketing is constantly changing, from the blurring of digital and traditional marketing (e.g. TV, out of home advertising) to the platforms available (e.g. TikTok today, but what will it be tomorrow?).
The great thing is, because of all of the insight and intelligence you’ve gathered, along with a robust approach to measuring the effectiveness of your campaigns, these small business owners can be confident that they are embarking on something new in a way which is most likely to deliver a return on investment. And if it doesn’t deliver this time, they will learn quickly how to make it do so next time.
Ask you data questions and be inquisitive
Data is a passive and objective thing. The context of it provides meaning and insight for your business. This is why briefs of ‘have a look at the data and see what you can find’ aren’t effective at delivering business change or results.
For example, if you ask questions such as:
- What are my website’s top traffic sources?
- What are my top exit pages on my website?
- Which email campaigns had the best open rate?
- Which social posts secured the greatest reach?
You’ll get a number or a selection of creative back as the answer. But what does that mean you should do next?
For example, if the answer to the first question is that organic traffic is your top traffic source:
- Is that because you don’t invest in any other marketing channels? If so, that leaves your business susceptible to Google result fluctuations and perhaps diversification in your tactics is needed
- Look at what the top landing pages and what keywords/themes you are ranking well for. Is this something you can capitalise on further or does it mean you are only being found for one of your products and services?
Let’s take question three as a further example, say you look at the top 5 email campaigns in terms of their open rates:
- What do they have in common? Are they on a similar theme, have similar creative? How do their subject lines compare? Look for points of similarity and differences to try and identify common trends which you can replicate again in your future campaigns.
It’s quite easy to see the path you can go on by asking questions like these, which will give you meaningful insight and actions to improve the effectiveness of your digital marketing campaigns.