As you invest time, money and effort promoting your small business, it’s also important to devote some time to examining how your various marketing approaches are working to support your business and its revenue goals.
Measuring the success of your marketing efforts is critical to understand what’s paying off and, equally important, which investments aren’t worth repeating. Evaluating your marketing efforts will help you expand the initiatives that are providing benefits to your company while reducing the amount of marketing spending you waste.
Define Your Goals
As with most business initiatives, a successful marketing campaign starts with taking some time to identify your goals. Increasing revenue is probably the most important (and obvious) goal for any marketing effort, but you need to also think about the supporting goals that will help you drive higher sales. Facebook likes or retweets, for instance, may feel gratifying but ultimately play little role in generating revenue or profitability.
Instead, you’re better off trying to calculate the return on your marketing investment. Some businesses prepare a broad marketing ROI calculation that divides how much they spent by how much revenue increased after a marketing campaign, but it’s more effective to determine the ROI of each initiative to understand the effectiveness of your spending and to guide future investments.
Some other critical efforts to measure include:
- Lead generation: How many prospects contacted your business in response to your marketing efforts? Where did they come from? How did you and they find each other? Your website? Facebook ads?
- Conversion rate: How many of those leads converted into paying customers? How much did they spend? On what? How can we serve them going forward?
- Sales cycle length: Once someone engages with us for the first time, how long does it make to complete their first purchase? Can we speed that up?
- Customer retention: How many customers have made more than one purchase from us? How do we maintain that relationship?
There are also some metrics specific to your various marketing channels, including your website and your email marketing efforts.
At a high level, examining the performance of your company website involves using analytics software to understand how many prospects are coming to your site, how they find the site, how long they’re staying, and what actions they’re taking as they navigate your pages.
For small businesses, the best tool to start with is the free Google Analytics service, which allows you to measure key statistics about your website traffic, including the number of visitors, the keywords they used to find your site, and other important metrics.
A number of statistics can provide insights into the success of your email marketing efforts. Some of these may be tricky to measure on your own, but are easily available if you’re using an email service provider to distribute your email newsletters or promotional announcements. Some of the key metrics to focus on include:
- Open rate: What percentage of your emails are actually being opened? This depends, in large part, on your subject line and the first few words that appear as message previews in some email clients.
- Click rates: Once someone opens your message, what percentage takes your desired action?
Armed with these insights, you can adjust your marketing mix to improve its overall effectiveness, as well as your company’s performance in the marketplace.
The views expressed herein are those of Megan Rutherford, as of the date above and are subject to change. This publication is for informational purposes only and should not be construed as a recommendation for any specific insurance product or service. Information has been collected from sources believed to be reliable, but has not been verified for accuracy. These views and opinions do not necessarily represent those of Bryn Mawr Trust, its directors, officers, affiliates, and/or any/all of the contributors to this site. It does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not endorse any third-party companies, products, or services described herein and assume no liability for your use of this information.