Data. We’re drowning in it. There are so many metrics to prove marketing’s effectiveness, and it’s tempting to throw all of them into a thick report to show the science behind what we do.
But if you want to move away from showing how successful you are at measuring to how effective you are at marketing, here’s a short guide to picking the right metrics for the right job and the right audience.
The first cut is easy – decide if the report is for the board or your marketing team. If it’s for the board, the report is strategic and will therefore have three areas of focus:
1. The overall impact of marketing on the business
2. How marketing has built the brand
3. How marketing has generated business
These metrics are important for the marketing team too.
They form the benchmarks for how effective their activity is, periodically. But the marketing team will also generate more frequent tactical reports detailing the effectiveness of all the possible levers they can pull across the customer journey.
These can include reach, frequency, impressions, clicks, cost per click, downloads, opens, likes and shares. They’ll also include conversion rates for landing pages, websites and nurturing campaigns.These are the areas the team will seek to optimise day-to-day in order to impact the strategic KPIs. This level of detail isn’t relevant for the board.
In this article, we’re going to focus on the strategic report for the board, leaving the tactical stuff for another time.
Before we start, we assume that you have the necessary tracking in place to know the source of your prospects, with the ability to follow that tracking through to your CRM and measure what kind of customers they become.
If not, we have a future article planned to help you out, so stay tuned for that.
Once you’ve got your tracking in place, attributing customers to marketing is relatively simple to achieve for your direct response activity, but harder to quantify for brand building.
We’ll offer some simple solutions to this problem for you later on.
Report section 1: marketing’s business impact
For most B2B businesses who have long sales journeys, this will include booked revenue and pipeline value that is attributable to marketing within the period of the report. It will include revenue from new customers and existing customers where CRM activity has generated the business. It may also show growth in the number of customers and be broken down by segments of strategic focus such as industry and geography. To show growth trends you may choose to show figures for the current quarter as well as year-to-date and year-on-year data.
This section of the report mirrors the revenue growth format, but shows the profit generated from the sales attributable to marketing. This is an important metric, showing the quality of customers vs. the volume shown in the revenue growth.
Average lifetime value
This requires a little more heavy lifting in your CRM data, but it’s worth it, as any increases in the rolling average will give a top-line view of how successful you are at generating repeat business.
Market share growth
This is relatively easy to calculate. First, find the annual spend in the category and location in which you operate – most sectors have analyst reports which will give you this figure. Then, express your annual revenue as a percentage of that number. If you’re midway down a crowded market, you might choose to show a share of market relative to your top ten competitors, taking the revenue figures from their annual reports.
Another easy metric to provide from your CRM is loyalty. First, select the customers who have bought something from you in the last 12 months (this time frame could be longer, depending on the length of your sales cycles).
These are active customers as opposed to dormant ones who may or may not be loyal to you.
From this pool you’ll select those who have been with you for over a year – any who have been with you for less time are considered new and won’t have a long enough trading history to demonstrate true loyalty.
From this pool you can show the average, longest and shortest length of relationship. Ideally, all three of these will increase year on year.
Report section 2: brand building
Let’s face it, unless you’re a major B2B corporation, most of us won’t have the budget to commission any form of brand research. There are, however, some simple and effective ways to measure your brand’s impact and growth which we’ll share here.
One of the simplest ways to track growth in your brand awareness over time is to measure the direct traffic to your website. This figure shows the volume of visitors to your website who typed the address directly into their browser (if they did this, they were looking specifically for you and are therefore aware of your brand name).
To supplement this view, you could use GoogleAds’ Keyword Planner and GoogleTrends to measure the volume of searches for your brand name. This works if you have a distinctive brand name but would be less useful for generic brand names like Shell or Seat.
Finally, you could use social listening tools to track the volumes of brand mentions outside of @mentions and the official, owned channels.
Correlating these three measures against your brand building activity will provide a good picture of its effect on brand awareness.
BUT – and this is an important but – expectations around this data must be carefully managed through an understanding of the time scales involved in brand building.
If, say, you’ve launched a brand campaign across a number of channels, you will have planned for it to play out over at least five to six months. If the board is looking for results to show in the first few months, they’ll be disappointed, as any noticeable growth will only start to show towards the end of the five-to-six-month period. It’s important they understand that brand building is a long-term, consistent investment in growth, but over time there turns have a deeper, longer-lasting impact than the short-term direct response activity.
That’s it for the first part of this article. Next, we’ll dig deeper into further brand metrics and the essential strategic measures for your direct response and lead generation reports, so stay tuned.
If you need help with anything we’ve touched on in this article, why not reach out to us at [email protected]?
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