Marketing is essential to the success of most businesses, but it can also be a significant cost. It still amazes me to see businesses spend a lot of money on marketing activities without any thought to how they are going to measure the financial return of that investment. And I think that is the key – you need to shift your thinking of marketing as a cost that must be endured, to an investment that must be managed.
When you invest in shares or real estate, the performance of that investment is measured by a well-defined set of criteria or metrics. But when you invest your hard-earned dollars in marketing – how much time do you spend thinking about how you will measure the success of that investment, and what success even looks like?
Before you finalise your next marketing plan, make sure that you think about how you are going to measure the success of your activities. Here are some tips to ensure your marketing plan will let you assess how well you are investing your money and highlight areas where you can change your strategies.
- Have clear and measureable objectives and outcomes. One common method for writing objectives is to follow SMART principals: Specific, Measurable, Achievable, Realistic, Timely
- Determine what you performance benchmarks should be. Consider how similar campaigns have performed in the past, or find industry averages for the type of marketing program you are running.
- Always identify the performance areas that need to be improved, and be sure to always test something in every marketing campaign to ensure you are raising the average performance levels over time.
- Decide what your key target value will be – is it number of leads, number of sales, average order value, profit margin?
- Continually re-assess your marketing investments and ensure that you are always testing different channels to reach your audience with the greatest cost/profit ratios.
Have you had success in measuring marketing performance. Share your story below.