If you still subscribe to the "50% of my marketing works but I'm not sure which 50%" axiom, it's time to move your business to the next level.Marketing must be measured. Just like any investment of time, energy or money you need to know what level of return you can expect.
Sure marketing is both an art and a science, so you can't measure everything. But you have to start somewhere.
Here are some very simple metrics that you should track:
Response Rate: the number of responders divided by the number of recipients. This metric can be used for email, direct mail, calling and event campaigns. When measuring response rates, keep this number in the back of your pocket: 1% is the industry average for direct mail response rates.
Conversion Rate: the way to calculate conversion varies by industry but it is essentially the number of new, paying customers divided by total prospects. For example, let's say you email your database about a new product or service. Responders will just call you or email you back for more information. Conversions, on the other hand, are those that actually purchase.
Traffic: if you have a retail shop, measure how the amount of foot traffic for your center, your shop and even particular areas of your store. Test how traffic changes by varying your signage and in-store messages. If you don't have a retail presence, measure your web traffic and how that changes based on your marketing efforts.
Percentage of Repeat Purchases: how many of your customers are repeat business? This is a key metric to understand since it is more costly to sell to new customers than to sell to existing customers.
Sales: measuring sales goes without saying. You should always know your sales cycle and how that is impacted by controllable (marketing) and uncontrollable (weather) circumstances. Also be sure to measure sales against all marketing initiatives so you can track how an initiative impacts sales.
The above metrics are just the tip of the iceberg when it comes to measuring marketing, especially if your business is online. Really you should be able to measure every advancement of the Sales Funnel, from Stranger to Advocate.
Most importantly, be sure you track your metrics consistently and over periods of time. This allows for direct comparisons.
Finally, make sure the data you track becomes actionable. As always, think with the end in mind. Ask yourself what you would do with the data when the measuring is complete.
To move your business to the next level, the marketing you measure should ultimately enable you to allocate your resources in a more informed manner.
Response Rate: the number of responders divided by the number of recipients. This metric can be used for email, direct mail, calling and event campaigns. When measuring response rates, keep this number in the back of your pocket: 1% is the industry average for direct mail response rates.
Conversion Rate: the way to calculate conversion varies by industry but it is essentially the number of new, paying customers divided by total prospects. For example, let's say you email your database about a new product or service. Responders will just call you or email you back for more information. Conversions, on the other hand, are those that actually purchase.
Traffic: if you have a retail shop, measure how the amount of foot traffic for your center, your shop and even particular areas of your store. Test how traffic changes by varying your signage and in-store messages. If you don't have a retail presence, measure your web traffic and how that changes based on your marketing efforts.
Percentage of Repeat Purchases: how many of your customers are repeat business? This is a key metric to understand since it is more costly to sell to new customers than to sell to existing customers.
Sales: measuring sales goes without saying. You should always know your sales cycle and how that is impacted by controllable (marketing) and uncontrollable (weather) circumstances. Also be sure to measure sales against all marketing initiatives so you can track how an initiative impacts sales.
The above metrics are just the tip of the iceberg when it comes to measuring marketing, especially if your business is online. Really you should be able to measure every advancement of the Sales Funnel, from Stranger to Advocate.
Most importantly, be sure you track your metrics consistently and over periods of time. This allows for direct comparisons.
Finally, make sure the data you track becomes actionable. As always, think with the end in mind. Ask yourself what you would do with the data when the measuring is complete.
To move your business to the next level, the marketing you measure should ultimately enable you to allocate your resources in a more informed manner.
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