How to Measure the Effectiveness of Marketing through Metrics
Written by Kristin Marquet for Gaebler Ventures
Many small business owners run marketing campaigns and wonder why the conversions are low. Because they do not know how to measure the effectiveness of each campaign they run, they continue to make the same mistakes without considering implementing metrics.
Measuring marketing campaign results is imperative to determining whether your efforts have been successful. Yet still, many business owners do not track and monitor their marketing results and continue to spend money, but have no idea whether they are throwing it away.
Measuring the accuracy of any campaign can be difficult but with the following information, you will have a better understanding on how to gauge the performance of your efforts.
Select how you want to measure the effectiveness of your campaigns. Objectives of your marketing campaigns will determine which metrics to use. If you are interested in getting more people to subscribe to your newsletter, then the number of people coming to your site and signing up for your newsletter should be used as the metric.
Having goals are vital to the success of any marketing campaign you run. Be specific when defining goals. Stating that you want more subscribers to add to your list is not good enough, but stating that you want a 25% increase in 6 months clearly defines what you want to accomplish.
Determining where you are generating the best results is crucial to the success of any marketing campaign. Look at the amount of places you advertised and the amount of responses that you have generated. Marketing campaigns are investments for your company's future and each must be measured and monitored to make sure you are not throwing money away. Comparing results from different marketing campaigns you run will provide you with all the information you need to tweak any future campaigns you run. ROI (return on investment) will help improve any campaigns that you run. Use the following formula to determine your return on investment (ROI):
You spend $3000 on a bulk mailing of 6,000 pieces (includes printing, labeling and shipping) and you get 12 calls as a result. Out of 12 calls, you sold eight customers and, as a result generated $8,000 in revenue. That is how your marketing return on investment determined. Essentially, it is $5,000.
Each marketing campaign you run contains certain elements that may not be able to be measured directly. For instance, if you place an ad at a bus stop, you will not know the exact amount of people who may see it; however, to make your marketing efforts more effective, use coupon or reference codes for customers and tracking.
Test, test and test some more. Analyzing the results of your marketing campaigns is vital. For instance, if you are running two ad campaigns, one generates a 3% response rate, and the other generates a 12% response rate, you know that you need to tweak the first one. Perhaps changing the headline or a graphic will increase conversions. Sometimes a tiny change in the headline or copy can drastically improve response.
Kristin Marquet will be receiving her MBA from Harvard University in Fall of 2010. She has worked in the marketing and public relations field for over 10 years.
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