Signpost CEO and co-founder Stuart Wall was quoted this week in the Inc. article below on measuring your return on marketing. You can check out the original article here.
How Marketing Can Pay You Back
Mapping out and carefully executing a marketing plan with the right balance of digital and traditional media is essential to the growth of your business, but it’s every bit as important to know—for certain—that what you have in place is providing the payback you’re after.
Stuart Wall, CEO of Signpost, an online advertising service that connects local businesses with new customers, says he often sees small businesses struggling with overpayment for marketing campaigns using sites such as Facebook and Yelp. One of the ways they can avoid that trap is by paying close attention to the metrics they use to determine their marketing spend.
Metrics and models
“I recommend a cost-per-acquisition (CPA) model, because with this metric, small business owners are only paying for customers coming through the door rather than for ad views, which don’t guarantee conversion,” he says.
Cost-per-1,000-impressions (CPM) is another metric commonly used to measure marketing effectiveness, but Wall feels it is better suited for bigger companies that have a larger target audience and are looking to increase brand loyalty. “With smaller businesses, it’s all about targeting a niche audience and creating a positive in-store experience to secure repeat visits,” he says.
When business consultant Linda Pophal, owner of Strategic Communications LLC, works with a client to create a marketing plan, one of the key deliverables she includes is a document that outlines each of the tactics along with responsible parties and timeframes/outcomes. “This becomes a working document that is then used to monitor progress as the plan is implemented,” she explains.
What to measure
While the metrics she includes in the plan to track results vary based on the client’s goals, objectives, strategies, and tactics, common ones include increases in:
- levels of awareness and/or preference;
- number of leads and/or conversions;
- market share;
- number of unique, new, or returning customers; and
- decreases in number of complaints, and
- number of lost customers/clients.
Pophal, author of The Complete Idiot’s Guide to Strategic Planning, says there are three keys to monitoring plans to make sure you are getting the biggest bang for your marketing buck: Assign a single person to be ultimately responsible for each item, establish regular reporting timeframes, and make adjustments as appropriate, based on what you learn.
Measuring return-on-marketing-dollar investments is relatively easy, involving just a simple ROI equation, says Jessica Sharp, a principal in Maven Communications. However, she warns, it’s important to include all costs in that equation. “A successful small business social media campaign may require 40 hours a month to maintain, and as we all know, time is money,” she stresses.
“Marketing is a science that is measurable and readable end-to-end,” say Don Keane, vice president of marketing at Angel, a provider of on-demand customer engagement solutions. “With the appropriate strategy and tools, SMBs can absolutely master this and ensure their efforts are beneficial and laser-focused on not only generating revenue, but also creating an experience that turns new customers into returning customers.”