In Part 1 of our guide to measuring marketing’s effectiveness, we examined the key metrics required to demonstrate overall business impact. We then explored ways to measure brand awareness. In part two, we’ll focus on further key measures for brand impact, and move on to measuring how the marketing has performed in terms of business generation.
If you haven’t yet read Part 1, we’d recommend doing so as we’ll be jumping right back in where we left off…
Once again, our aim is to prioritise the essential information needed for a board report. The data needed by the marketing team to optimise these results will be the subject of a separate article.
Report section 2: brand building (continued)
Recall and perception
Budgets permitting, you can delve a little deeper than the top-level awareness metrics we mentioned in Part 1. By asking the right questions, you’ll gain a better understanding of how your target market perceives you against the competition. You’ll also discover how persuasively your offer and marketing messages are resonating.
Recruiting respondents can be achieved either by leveraging your advertising and PR relationships with publishers, or through social media platforms, using a service like Liveminds.
Another vital source of feedback about brand impact is your sales team. Regularly check in with them for on-the-ground intel on whether the brand is affecting their ability to open doors and how they’re welcomed and perceived when they meet.
Trust, recommendation and satisfaction
Your Net Promoter Score® (NPS®) is an industry standard benchmark used to gauge how satisfied customers are with the brand. Survey respondents are asked how likely they are to recommend you to their friends and colleagues on a score from 1 to 10. While this is a useful top-level metric for the board, running the survey also provides the opportunity to dig deeper. Ask questions about what customers are satisfied or unsatisfied with, and why.
Depending on the quality of your CRM data, you can also gain insight into any patterns emerging from different customer segments.
There are potential problems with an over-reliance on the NPS® measure, however, as it can suffer from bias if your sample size is too small.
It’s wise to supplement your snapshot score by monitoring review sites, social signals and feedback from your customer service team to get a full picture of how well your customers trust you and are satisfied with your products and services.
Report section 3: business generation
This should show the revenue generated from customers who entered the prospecting funnel through marketing activity and were converted by sales. The report should present figures for the period since the last report, and highlight the trend over previous reporting periods. Ideally, it will split this into revenue from tracked direct-response campaign activity against brand response (originating from website leads and inbound calls).
Other growth metrics
To supplement the top-line revenue figures, include the number of customers acquired and the average order value. You may also want to breakdown the results into segments of strategic importance such as industry and regional growth.
To demonstrate the quality of leads generated, measure the conversion rates from lead to sales qualification and customer. Again, present these for the reporting period as well as showing the trend over previous periods.
This is where you demonstrate what the marketing spend on direct response/ABM marketing was for the period, and what was delivered in return. This should include:
– Total spend on media, production, agency fees etc.
– Return on advertising spend (ROAS), calculated by dividing the revenue generated by the total spend.
– Return on investment (ROI). This is more difficult to calculate, as it shows the amount of potential PROFIT generated from the budget as opposed to the REVENUE generated in the ROAS calculation. You’ll need to work with your finance team to gain a picture of the average profit margin for each of your products and services, matching these against the records of what has been ordered in your CRM. If you’re purely a service business, the potential profit may not match the actual profit due to overruns.
Less clutter, more clarity
As previously mentioned, there is a wealth of data you could present to the board. Our purpose here has been to suggest the core metrics that will strategically demonstrate how effective your marketing activity is.
You may choose to add other information to provide further detail, but always remember that the key to effective reporting is clarity. Don’t overwhelm your executives with data. Stick to what matters to them and avoid the temptation to try and look clever by throwing everything but the kitchen sink at it.
Need guidance putting your report together or making sense of your data? We’re here to help. Get in touch with us at [email protected].
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