Deciding what marketing to do comes from knowing what works. That’s why it’s handy to know how to measure marketing performance.
I get it. Completing a performance review seems like another task to add to your enormous list of higher priorities. So let me be frank. If you aren’t reviewing what you’ve done, chances are you are wasting time, money and opportunities. I couldn’t say it any clearer than Peter Drucker.
So where do you start?
I’ve broken down the simple steps you can take to measure marketing performance and get more clarity on what you should do more and less of.
1: List all the marketing activities you ran in the last 12 months
If you’ve already got a marketing plan that you work to then your list is already sorted. If not, don’t worry.
Simply write down all the marketing you did in the last year (or even better create an Excel worksheet – I love a good table). This could include things like Google Ads, magazine ads, trade shows, giveaways, social media activity, email marketing… You get the idea.
Don’t forget to add marketing you did that was free. For example, if you create posts for Facebook yourself this is still a relevant marketing activity that should be evaluated because time is money.
2: Write down the key objective for each activity
Pop this in a column – titled objective – next to the marketing initiative. What if you didn’t have an objective? No problem.
Ask yourself now – “what did I want to happen as a result of doing this activity?” This is the outcome you expected. Add this in the objective column.
Want help creating marketing objectives? Read this post on how to write marketing objectives and get your hands on my free marketing objectives worksheet.
3: Gather your results
Did the activity help you achieve the objective you outlined?
There are many ways to measure marketing performance, and there are different metrics depending on the activity. So how do you know what to track?
Look at your objective again and ask yourself – “what information or data shows me that the outcome was achieved?” That’s the data you need to measure if the activity worked. Let’s use an example to illustrate.
I’ve sent an email campaign to my subscribers to get them to visit my website to find out about a new service (in marketing speak, I wanted to increase awareness). What results would I look at?
I would want to know:
- How many people opened the email (open rate = opened email / total emails sent).
- How many people clicked the link to new service page on my website (click through rate = people who clicked the link / people who opened the email).
There are so many great tools out there to help you measure marketing effectiveness such as google analytics, google ad reports, email marketing reports, social media insights or even a promotional code on a newspaper ad that customers must quote to get a special offer. Check out my article on important website metrics to track in google analytics.
4: How much did the marketing cost you?
Now you need to add a column with the costs for the marketing activity you completed. This would include all the costs you incurred to create the marketing. It might include things like graphic design, printing, advertising spend, photography or email marketing subscription costs.
5: Calculate your return on investment
For the purposes of this article, I’m going to keep return on investment (ROI) simple. The easiest calculation you can use is this one:
You might not know how much incremental revenue you generated so an estimate will do. The goal here is to get you in the habit of thinking about how marketing delivers for your business.
Using my example, if I had five clients take up my new service because of my email campaign, then my incremental revenue would be the total revenue I generated for the new service from those five people.
What if your marketing activities didn’t have a cost or the activity wasn’t designed to generate revenue directly? In this case it’s enough to analyse if the activity generated the result you wanted. Not everything can be measured simply so don’t get overwhelmed. Measure what you can, estimate what you can’t.
6: Prioritise your activities
Look at the table you created and identify the activities that stick out as performing well or poorly. I find it helpful to mark activities as start, stop or continue. Add another column and mark activities as follows:
- START: What isn’t on the list that you need to be doing
- STOP: What activities should you stop (note – before you cancel activity that didn’t perform, it might require a bit more investigation as to why it didn’t work)
- CONTINUE: What is delivering the results and should stay on your plan
You made it!
You’ve now completed a review of your marketing and know how to measure marketing performance. You’re in a great place to set some excellent marketing priorities.