This is part 2 in our series on measurement-based marketing. Read part one here.
Many marketing organizations are task-based, with staff busily engaged in activities that aren’t centered around goals and rarely produce measurable results. Part 1 of this series reviewed why task-based marketing is so common, why it’s not effective, and why CEOs and other decision-makers are eager for a better approach.
That better approach is measurement-based marketing.
Growth-minded companies are shifting away from a task-based approach and adopting measurement-based marketing that delivers tangible results. By aligning their marketing efforts with their business strategies and goals—and developing concrete metrics that tie marketing to performance—they’re turning their marketing into a true growth driver.
If you’re ready to significantly increase your revenue by adopting measurement-based marketing, here’s how to get started.
Step 1: Develop Measurable Marketing Goals
If you don’t know what you want your marketing to achieve, you won’t know whether it’s working. It sounds obvious. But sadly, most marketing isn’t built around goals.
That’s why the first step in measurement-based marketing is to develop measurable marketing goals that align with your strategic business goals. For example: Are you looking to gain more wallet share from your existing clients? Or drive warm leads for your newest product or service? Or increase your penetration in a high-growth vertical market?
Articulating and gaining agreement on your marketing goals positions your team to develop an effective revenue funnel for each—using strategic marketing to move buyers further down the funnel until they become customers.
Step 2: Establish KPIs
As the name implies, measurement-based marketing demands good data. Without it, you won’t know what to keep doing, adjust, or stop doing for the best results. Maybe the most frequently downloaded guide isn’t resulting in sales…but a different guide that’s downloaded less often IS. You won’t know unless you have the right data.
That’s why KPIs (Key Performance Indicators) are critical to measurement-based marketing. KPIs are specific, quantifiable measures that tell you how well your marketing is performing, how much marketing is contributing to revenue growth, and how strong an ROI you’re realizing from your total marketing spend, including talent.
Marketing analytics like KPIs help you move away from the “should” approach that’s common when marketing teams are task-oriented: “We should be sending out one email a week” or “We should be posting two blogs a month.” Unless those “shoulds” are grounded in strategy, tied to goals, and support the most critical KPIs, it’s just work for the sake of work—and not necessarily what you need to create predictive revenue funnels that result in closed business.
The following are a few of the most common KPIs growth-minded companies measure. (For a deeper dive into the types of marketing analytics, read How to Start Your Marketing Analytics Program or download our CEO’s Guide to Marketing Terminology.)
- Cost per lead: How much of your marketing budget it takes to acquire a lead, calculated by dividing the cost of a marketing tactic by the number of leads generated.
- Number of marketing qualified leads (MQLs): How many buyers take an action that demonstrates interest, like clicking on a link in a marketing email.
- Number of sales accepted leads (SALs): How many leads have been reviewed by sales and considered viable prospects.
- Number of sales qualified leads (SQLs): How many leads are ready to be contacted by sales, based on criteria like company size, industry, and decision-making authority.
- Customer acquisition cost: How much of your marketing budget it takes to acquire a customer. The greater their value, the more you’ll be willing to spend to acquire them.
- Customer lifetime value: How much value (in dollars) a customer will yield over their entire lifecycle with your business.
Step 3: Invest in Marketing Analytics Tools
Since data is vital for effective measurement-based marketing, you’ll need the right tools to track and report on that data. You’ll find lots of marketing analytics tools on the market, which can make choosing the right ones a bit daunting. Here’s a good starting point:
- Use a tool like Google Analytics or Adobe Analytics to assess how buyers are engaging with your website.
- Use a SEO (search engine optimization) tool like SEMrush or Moz to evaluate your website’s organic search performance.
- Use a CRM (customer relationship management) tool like Hubspot to track every marketing touchpoint with your buyers and assess how well each is performing.
- Use a social media tracking tool like Hootsuite to track how your followers are engaging with your company.
- To bring it all together into a complete picture—and avoid the risk of siloed measures—use a data visualization tool like Tableau, which pulls together datasets from various sources and makes it easy to compare how different aspects of marketing are contributing to your results.
Step 4: Optimize Your Marketing for the Best Results
With your analytics tools generating data on how your marketing is performing, you’ll be equipped to make informed decisions on how to refine, adjust, and optimize your campaigns to achieve even better results. No matter how well you’ve done your homework, you can never predict with 100 percent certainty how a particular campaign will perform based on your business and your place in the market, so some degree of optimization will always be required.
You’ll want to monitor your KPIs frequently—typically every two weeks or monthly—using a dashboard that provides an at-a-glance view of campaign performance. The insights you glean will help you test and learn, allowing you to continually fine-tune to improve your results. And if you find a particular piece of content or tactic isn’t performing up to par, don’t take it as a negative; it’s actually a positive opportunity to shift your resources to what’s working well.
Engaging in measurement-based marketing—including regular monitoring and optimization of your campaigns—takes time and effort. You can’t simply set it and forget it. But the payoff can be significant: On average, Marketri clients see a 20-30 percent improvement in their campaign performance, as measured by their KPIs, when they replace task-based marketing with measurement-based marketing. And that ladders up to what you’re really looking to achieve: Incremental increases in revenue generated, customers acquired, services utilized, and other critical business objectives.
Find out how to take your measurement-based marketing even further in Part 3 of this series, which will focus on the value of attribution models and other sophisticated marketing analytics.
If you’re ready to drive better business results by making the switch to measurement-based marketing, schedule a free consultation with our CEO Deb Andrews!