Measure marketing performance effectively
Why should you measure your marketing?
- Measuring your marketing performance is critical to business growth. If you don’t, you don’t know what is working and what isn’t. And that means you’re probably wasting loads of time and money on marketing that isn’t working!
- Why do I say this? Because pretty much every client I have worked with or met, has not been measuring their marketing as effectively as they could have been! So when we started working together, I have been able to identify quite a lot of cost efficiencies and savings. There have also been prospective clients I have met who have been wasting huge amounts of money (we’re talking hundreds of thousands of pounds for the bigger ones!). And even some of the smaller clients I met, the solopreneurs or individuals, in the region of £5,000. That’s a lot of money to waste on marketing, especially for a small business!
- And another thing to remember is that time is also money. So, if you’re not measuring what you’re doing and reporting on it, you won’t know if the things you’re spending money on are working.
How to set up a reporting system
- One of the first things I do when I start working with a new client is to help them set up their reporting to make sure they have a proper reporting process in place. We create a spreadsheet with all the strategies and tactics and decide how we’re going to measure each one. Every month a report gets filled in, and we talk about it at our monthly review meetings. Or, if they are running their own quarterly review meetings with the board, for example, they’ve got all the relevant information in there.
- What will become really obvious is that if you’re spending money on something that’s not working, you’ll know that either you need to tweak, massively reduce your spending, or totally stop that activity altogether.
Understanding the numbers
- The key to marketing is to always test. You’re always looking at what’s working and thinking about how you can improve what you’re doing. I love stats and analysing figures and reports. I did Economics, Accounting and Law at university, so I really enjoy looking at numbers. And if you don’t understand your numbers, you’re not going to be able to grow a business successfully!
Marketing metrics you can measure
- Spend on marketing, and how many leads and customers you get from that.
- The cost to get you a lead (or Cost Per Lead, CPL).
- The cost to get you a customer (or Cost per Customer, CPC).
- Conversion rates. How many people that come to your website convert into leads or customers?
- The return on investment, the ROI. How much money do you get back for every pound that you spend?
Don’t forget to look at this data across different channels. In the past, I’ve seen that some channels, for example, PPC or Google ads, might produce a much higher return on investment (ROI) than other channels where there’s less intent from the customer at the beginning.
What is Customer Lifetime Value?
- Another metric I love is Customer Lifetime Value (or CLV). And I’m always surprised by how many of the bigger businesses I’ve worked with don’t use this as a metric. But don’t worry – I’ve introduced it to them! And if you want to find out more, I’ve written a blog post here on why customer lifetime value is so important.
- The CLV is how much your customers are worth to you over the lifetime they stay with you. For many of us, customers won’t just buy once. Hopefully, they’ll come back and keep buying from us, time and time again. Repeat business is fantastic because it’s much easier to retain a customer than it is to acquire one in the first place.
- In other words, once you’ve got a customer, you want to do everything you can to make sure they have an amazing customer experience and want to keep buying from you. When they do, the value of that particular customer over the lifetime with you is significantly higher than their first purchase. So look at the average CLV across different customers and different channels. You can then compare this to the cost of acquiring that customer. For me, for example, the cost of acquiring a customer through networking is one of the most efficient ways. And even though it does take time for me to build those relationships (and my time is money!), it’s all worth it because the CLV I get is fantastic.
- If you want more information, I’ve also written a blog post on 7 ways to increase your customer lifetime value. And another one that is relevant to this topic on six key marketing metrics.
Related content on marketing performance
#7 – The benefits of networking.
#10 – Goal setting in life and business with Will Polston.
#15 – The customer journey is super important.
#22 – Why you need to understand management accounts.
#30 – The importance of business planning.
LinkedIn post on measuring your numbers
If you’re not already measuring your marketing, then make sure this is one of your priorities! You can start with a spreadsheet by listing all the things you’re spending money on and have a column that shows how many customers you got from that activity, how many leads, what it cost you to acquire that lead or that customer, etc. And then you can look at the return on investment.
Do let me know how you get on with measuring your marketing and what insights you get. And if you need some help, check out my Work With Me page. You can book a chat with me. We’ll discuss the challenges you’re facing, and talk about how I can help you grow your business.
Also if you have not already done my free business growth audit then you can do that here 🚀 Ultimate Growth Audit 🚀 – it’s free and you will get a personalised report in less than 5 mins.