10 ways to measure marketing success
19th Century department store magnate John Wanamaker famously declared “Half the money I spend on advertising is wasted, the trouble is I don’t know which half.” Times have changed. Today it’s easy to see what works and what doesn’t. (Arguably there’s too much data!) So how do you know what to measure and what not to?
Let’s start with what your CEO and the business care most about.
What percentage of overall revenue can be directly attributed to
marketing activities? The higher the percentage, the more effective
your marketing. It sounds easy, but how much is attributable to
marketing and how much to sales? A crude rule of thumb is just
over 20% for new customers and 15% for existing customers. This
calculation isn’t perfect and will vary by business, but it’s a decent
starting point for negotiations with the Head of Sales.
How much did you spend and how much did you make? Obviously the idea is to make more than you spend, e.g. if you spend £1,000
and make £10,000 that’s a gain of £9,000 or a return on investment
of 900%. Knowing your ROI will show you what is working and what
isn’t, so you don’t waste your marketing budget. If something works,
double down on it. If you find that something doesn’t, find out why
and change it or kill it.
- Pipeline growth
This is an easy one to measure, because new customers are easy to
define. How good is your marketing at ‘filling the top of the funnel’?
How many net new customers did marketing bring in? A percentage
of existing customers will obviously churn, which means you need
new customers to help you grow your business.
- Pipeline velocity
How good is marketing at moving leads through the pipeline from a
Marketing Qualified Lead (MQL) to a customer? What is the speed of
progression from one stage to another and how can marketing
improve this speed? How does the speed change from one month to
another, each quarter, one year to another etc.?
- Deal size
Bigger deals are better deals. They create more revenue for the
business and impact the bottom line. Marketing can directly
influence their size and number so track deal size, quarter to
quarter and month to month. Don’t go after such big fish you’ve got
no chance of closing them. Understand what your perfect customer
looks like and aggressively target that audience.
- Cost per lead
How effective is marketing at generating new leads? Make sure you
have figures by channel, so you know how much to spend on
acquiring a new customer. Bottom line is, are your leads worth the
- Conversion rate
What percentage of leads took the desired action? Obviously, the higher the conversion rate, the better you’re doing. It shows you’re getting more value from the visitors/ users you already have.
- Brand awareness
How familiar are consumers with your product or service? This is particularly important when launching a new product. Traditionally, it’s not been easy to measure, but digital has made it easier.
- Website traffic
Look at the ‘Direct’ channel in Google Analytics. How many people are looking for you? Is this increasing over time? Organic traffic and keywords ranking will tell you how good you are at SEO.
- Social & email
Look at your Social following and email subscriptions. How many people want to hear from you/ are talking about you? Is this increasing over time?
How are you doing for likes, mentions & shares on your social channels?
- Website traffic
- Put the bottom line first
There are many ways to measure success, but make sure you focus on those that demonstrate accountability and impact the bottom line. Don’t look at one in isolation. Make sure you have a balanced picture of your marketing success over time. Measuring success is key. Without it how will you improve?
- Measurement is Epik
At Epik we’re creative but we’re always accountable. We create work that works. To find out how we could help you not only measure success but build successful brands and communications call +44 207 459 4433.