Just like every other marketing specialist, you have one ultimate goal at the end of the day, week and month. You must figure out ROI, return on investment.
For most companies, it’s the determining factor for justifying the budget allocated to your team, your strategies, and your expenditures. It could be the key to you getting more budget to hire a larger team and spend more on your strategy.
Is the work you’re doing actually producing results? Generating revenue? Is your email marketing campaign producing the best results? What about social media? Which one of your marketing strategies are working better and, therefore, should receive more funding?
Figuring out ROI is one the most elusive aspects of any company leader’s job. but perhaps even more challenging in some areas of marketing.
According to a survey by MDG Advertising, 44% of businesses reported that they weren’t able to determine the impact social media was having on their business. Only 20% said they could quantify the success of their social media efforts.
The ROI for email marketing seems to be more clear-cut. The median ROI is 122%, according to a survey by Direct Marketing Association and Demand Metric. Their conclusion was that email’s ROI was as much as four times higher than other forms of marketing, including paid search and social media.
So, this could be considered the end of the story: Email marketing seems to outrank social media marketing…so do more of email marketing and less on social media, where things are still sort of fuzzy.
Not so fast.
With the kind of activity that goes on with social media—1.47 million active Facebook users visiting the site daily and more than 2 million Snaps shared on Snapchat every minute, you can’t afford to ignore its impact, no matter how difficult it may be to determine ROI.
And connecting with your audience demands just about every digital marketing tool you can leverage. According to a recent survey of B2B marketers, 44% said that “it is becoming increasingly difficult to capture our audience’s attention,” in comparison to the previous year.
It’s clear that you need a comprehensive strategy that includes a mix of tactics, tools, and strategies, but it’s still critical to get closer to determining the effectiveness and ROI of your efforts.
Here are several things to consider in your pursuit of the ideal combination of cost-effective marketing strategies that produce the most results.
1. Get closer to a true ROI on all of your marketing efforts.
It’s important to determine how you’re measuring the success of any campaign. Is it email open rates? Clicks? More leads? An increase in website traffic? Any type of engagement? Or do you boil it all down to final numbers, such as an increase or decrease in revenue?
The calculation for marketing return on investment (MROI) is this:
Incremental Financial Value Gained as a Result of the Marketing Investment – Cost of the Marketing Investment ÷ Cost of the Marketing Investment = MROI.
When determining MROI, the cost is one of the first things that come into consideration. It may seem pretty straightforward.
Social media, for example, may seem fairly inexpensive. But are you calculating everything?
“The MROI of social media activity often looks very high if you only count financial resources,” Avery says. “But if you look at the human resources required to develop content and respond to consumers’ posts 24/7, the number goes down.”
As a marketer, you need to estimate all costs related to the marketing activities, including staff time, creative development and media spend, she said.
2. Collaborate on a mutual definition of “success.”
This comes back to the dilemma of those proverbial “apples and oranges.” You can’t easily compare the two. The same with marketing. What are you measuring as indicators of a successful campaign?
If your marketing team generates thousands of new email subscribers in a quarter, you may find plenty of reasons to celebrate. However, your sales manager or other executives may not be as impressed if the sales funnel isn’t producing any strong leads.
While the bottom line is critical, success shouldn’t be limited to an increase in revenue. There are so many factors at work to keep your company sustainable. With marketing, it could be tied to your ability to increase customer loyalty and reduce customer churn.
The impact of customer loyalty can’t be underestimated. Without a continuous investment in marketing, many companies could be at risk of losing the interest of the customers they already have.
Collaborate as a team to determine how you will measure the incremental financial value of your marketing efforts. Consider all the factors that could be an indication of a successful—or unsuccessful—campaign. Use those various metrics to paint a larger picture.
3. Acknowledge the distinct strengths of each of your marketing channels.
No matter the mix of marketing tools you use, it’s important to understand and appreciate the role each of them brings to your marketing strategy.
Email continues to be among the most used, as well as most effective, marketing tools in the industry, largely because of the personal nature of the communication. Subscribers are opting in to receive communications. They’re indicating that they want to hear from you. That’s a powerful opportunity to get their attention.
The nature of delivery is personal as well. Your email messages are going straight to each subscriber’s inbox — a highly personal space. Email, through automation, also gives you the ability to deliver an even more personalized experience based on each subscriber’s activity.
Social media, on the other hand, offers an additional opportunity to engage with your audience, build a sense of community and send out further brand impressions. While it may not have that 1:1 experience, it can build upon the relationship you’re already developing through email.
Paid media also offers the opportunity to keep your brand fresh in the minds of your audience. And it also may be the final touchpoint that prompts your audience to make the purchase.
With so much going on, it’s understandable why measuring ROI can get complicated. In this case, does a Google Adwords campaign get the credit since it was the trigger for a purchase? No. All tools and tactics can play a role in the final outcome.
Recognize the long-term impact of any marketing initiative.
With the immediacy that’s so inherent with digital marketing — you can measure those opens, clicks, comments, and likes by the minute, it’s easy to lose sight of the long-term value of the marketing activities you’re doing today.
But, as with traditional marketing and advertising, you can’t lose sight of the fact that email marketing, social media marketing, SEO and other digital marketing initiatives can have a significant impact on your ROI two to three years from today.
When measuring ROI, leave room for metrics that include the long-term impact of factors like building up customer loyalty.
As you continue to build a case for the ROI for your marketing strategies, consider ways you can improve outcomes. With Delivra’s user-friendly email software automation, you can develop a more 1:1 personalized experience with your audience—the key to increased engagement. Contact us for a demo! We’ll show you what it can do for you.