Before you make a business investment, you want to be reasonably sure it’s going to pay off, right? For many businesses, the money spent on marketing is one of the single largest ongoing expenses. So, why should business owners be expected to approve the budget with no way of knowing how to track and improve results?
They shouldn’t. Yet, with traditional marketing, it is very difficult to report on ROI reliably. Unless you are using call tracking (which, by the way, can hurt your SEO) or asking every customer personally, you just can’t do it. Even if you use these tactics, it is still not an effective way to track your true ROI.
On the other hand, inbound marketing gives you a much clearer idea of your ROI, and clear pathways towards improving it – month by month.
In this article, we will take a look at the fundamentals of inbound marketing reporting and what you should expect from your team.
Sounds too basic? Well, it is basic, but most company goals focus on the bottom line despite the fact that those end-of-the-line goals are not always the best way to judge marketing effectiveness, especially not at first.
Think a little more broadly when establishing goals. Do you want to increase sales? Are you just trying to increase traffic? Do you want to build brand awareness? Do you want to improve customer loyalty or retention? Is improving customer service important to you? Do you just want to nurture current customers for up-sales?
You can only measure ROI against established goals. Make certain everyone knows what they are!
2. Key Performance Indicators - KPIs
Your Key Performance Indicators (KPIs) are the vital signs of your goals. Just think of it as an actionable scorecard that keeps your strategy on track. The KPIs you choose should have a direct correlation to your goals.
Depending on your goals and business, your KPIs will be different. I wish I could just list out the complete list of KPIs for your business, but I’d have to learn more about you first (which, by the way, I would love!). But below I have listed a couple different KPIs that may be valuable to your business:
- Total closed customers (obviously the most well-known KPI and can only be tracked if your sales team is reporting back to marketing!)
- Closed customers due to a certain channel
- Leads (MQLs vs SQLs)
- Cost per lead
- Appointments set
- Website traffic (Organic, Paid, Social, etc)
- Content downloads
- Blog views
- Landing page conversion rate
- Cost per lead
- Social media engagement/reach
- Unique website visits
- Customer retention
- Lead to customer closing rate
- Email/blog subscribers
- Mobile data (Traffic, leads, conversions)
All of these KPIs listed above can be helpful in reporting, but you probably don’t need to look at all of them all the time. It can be overwhelming! Your marketing team or agency will help you focus on just the KPIs that are influencing your goals.
3. Closed Loop Marketing
In order to effectively report on ROI, your marketing team must first implement closed loop marketing. Closed loop marketing happens when your sales team reports back to your marketing team with the results from the leads they generated.
This is not only important to help clarify ROI for the marketing team and for you the business owner, but more importantly it will help improve the marketing strategies and thus improve your return. Without receiving any feedback from the sales department, your marketing team will never truly know which marketing strategies are giving you the best bang for the buck.
4. Reports Need To Be Actionable
By looking at your KPIs, you should be able to formulate actionable items to improve your ROI. This is another reason why implementing and maintaining closed-loop marketing is so important. By following up with your sales team, you can see what marketing actions are the most beneficial vs. the ones that are just wasting your money. Trace your closed sales back to the source and analyze everything!
By analyzing your marketing strategies, you can see the true return on your investment. Find out which sources have brought in your highest return and start investing more money in these areas. With traditional marketing, you don’t know whether you billboard or TV commercial attracted that customer, so you will blindly keep throwing money at both. But with inbound marketing, you can easily compare your different strategies (blog, social media, PPC, etc) to see which ones have the greatest ROI and thus help you budget your marketing more effectively.