Seven Strategies for Measuring Marketing ROI

The pressure has never been greater on marketers in the industrial sector to demonstrate results from their marketing programs. Yet many marketers aren’t able to measure ROI or don’t know how to begin. These seven strategies will help you. Not all of them may apply to your organization or situation, so pick the ones that make the most sense and use them. Soon you’ll gain a solid approach to measuring marketing ROI.

1. Shift the marketing conversation
Whether you are the executive making financial and budget decisions, or reporting to one who is, you need to reframe the marketing conversation. For example, rather than focusing measurement on marketing “activity,” focus on marketing “results.” Rather than presenting in terms of “defending” your marketing budget and having executives look at marketing as a “cost center,” advocate to alter perceptions so that marketing is considered an “investment in revenue and profitability.” This strategy may represent only an attitude or culture change, but it should definitely help in your efforts.

2. Design measurable programs
You’ve heard the cliché that you can’t manage what you can’t measure. It’s only a cliché because it expresses a universal truth. By committing only to measurable programs, you are laying the foundation for determining ROI. Fortunately, the best-performing programs today are digital media. And digital media by its nature is measurable. You can track impressions, clicks, inquiries, conversions, time on page, length of view, and more.

3. Choose measurements that matter
Focus on those measurements that can give you valuable insight leading to decisions that will improve your marketing program. Here are some measurements that matter:

  • The three V’s: Volume, Value, and Velocity. Volume is the count of leads or deals delivered by a marketing program. Value is how much that lead is worth; a program might not deliver a high volume of leads, but can still be a strong program because those leads produce a higher amount of sales. Velocity considers how fast a lead converts to a sale.
  • Cost per inquiry. Measure, but beware of deceptive results. For example, a program may have a high cost per inquiry but deliver highly qualified prospects and more sales. On the other hand, a program that delivers a low cost per inquiry might look good but not result in sales.
  • Brand awareness. Brand awareness is the fuel that powers other marketing programs and can help prospects accelerate through their buy cycle because they are familiar (and presumably comfortable) with your company and its reputation. Good measurements of brand awareness include how much of your target audience you get in front of, the frequency of being in front of them, and cost per branding tactic.

4. Meet the needs of financially-focused executives
Many of the metrics that marketers track—impressions, clicks, video views, engagement opportunities, and so on—may not interest financially-focused C-level executives. Their interest is in revenue, growth, and net contribution. If you need to demonstrate ROI to an executive team, you should think in terms of financial outcomes, which are the most challenging to measure in marketing.

If a sale occurs quickly after initial contact, or if you are using only a limited number of marketing channels, it may be apparent what program generated the engagement opportunity that led to the sale, making financial ROI easier to measure. But it’s not always this easy. The industrial buy cycle can be long and complex, involve multiple decision makers, and include many marketing touch points. So when the sale finally occurs, which marketing program(s) get the credit? Most likely, all of the touch points contributed to the sale.

Some financial-based measurement strategies include assigning all credit for a sale to the first, or last, touch point. This approach is an easy one to take, but also serious flaws. It can make otherwise effective marketing programs that helped contribute to the sale look bad, or weak marketing programs that may have been the first or last touch look better than they are. Another approach is to track all touch points for a customer and assign them a weight, then calculate a percentage contribution to each touch point.

5. Demonstrate ROI for early stages of buy cycle
Although many customers don’t initiate contact with a vendor until later in their buy cycle, you can still demonstrate ROI of marketing programs that supports customers in the earlier buy cycle stages.

For example, web page views, clicks, content downloads, video views, webinar attendance, and mentions or shares on social media can all be tracked and tied to your marketing efforts. These important metrics measure customer awareness, interest, and engagement with your brand, products, and services. If you perform well in these measurements and show improvement over time, then you can reasonably assume your marketing is helping customers through their early stage buy cycle, and you are increasing opportunities to be on their list in later consideration and purchase stages.

6. Assign responsibility to ensure success
A person or a team should be assigned responsibility for measuring ROI. This includes tracking contacts and inquiries through the marketing and sales funnel, knowing the status of any contact or inquiry at any given time, and tracking all marketing touch points for any given customer or prospect. This is critical information as it is the only way you accurately measure the quality of your engagement opportunities, effectiveness of marketing programs, and the return you achieve.

7. Make decisions to drive improvements
Don’t just measure something because you can. Measure only what you can act upon to improve the performance of your marketing program. Each measurement should help you expand your understanding of how to make the program better and align it with your company’s strategic objectives. With every measurement, always ask: Why am I tracking this? What decisions will I be able to make? How will this help our program improve?

This post on measuring ROI was partially excerpted from “Taking a Strategic Approach to Digital Media.” This complimentary white paper also details ways to develop an effective digital media strategy and create a budget for digital marketing, as well as how to solve the challenge of measuring marketing ROI in this digital era. Download your copy today.

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How do you measure ROI? What strategies for effectively measuring ROI would you pass along to your peers in industrial marketing? Share your thoughts in the comments section below.

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Marketing Planning for 2014: 6 Ways to Evaluate Your Media Choices

It’s time to take off the gloves and get tough with your 2014 marketing planning. That means taking a hard look at your media choices and drilling down to find out what really works and what doesn’t. Last month, in Part One of this annual two-part series, we posed six questions you should ask about your marketing efforts. You can access the article here. This month, we give you six criteria to evaluate your media choices to help you choose the right channels to meet your goals and objectives.

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You have many choices about where to spend your marketing dollars. Digital channels. Traditional channels. Some combination of the two. It almost makes you long for the days of being limited to trade publications and printed directories. However, those channels have reached their twilight years.

Today industrial professionals are online looking to discover products, services, and suppliers. In a recent IHS GlobalSpec survey, 81 percent of engineering, technical and industrial professionals reported spending three or more hours a week on the Internet for work-related purposes, with more than 31 percent indicating the spend nine or more hours a week online.

But before you allocate your marketing budget for 2014, hold each of your media choices up to the light of these six criteria:

1. Reach. At its foundation, effective marketing is about reaching as many of your target audience as you can: long reach, right people, right time. Do you know how many people you’re reaching with your marketing programs? Are they the people who will specify, recommend, and purchase your products and services? Also, consider this often overlooked question: do you reach your target audience at the right time, when they are actively looking for products and services?

More than 70 percent of engineers use the Internet to obtain product specifications, and more than 80 percent are online to find components, equipment, services, and suppliers. Online catalogs and searchable databases of datasheets and product pricing and availability, like Datasheets360.com, help you effectively reach active searchers.

2. Frequency. It’s the digital era. It’s a global economy. Who knows when engineers might engage in a quest to discover products and suppliers? The answer is anytime, all the time. Which means your target audience must be able to find you 24/7. Channels that offer continuous frequency include your company website, search engines, and online catalogs. Compare that to print directories that are typically published once a year or an annual tradeshow.

3. Timing. Don’t underestimate the importance of timing in your marketing programs. Timing is about making a connection with your prospects when they are proactively seeking products and services. In other words, hooking them when they’re hungry. There are many good channels for connecting with active searchers, including your company website, online catalogs, webinars, and online events. Print catalogs and print directories will help you reach active searchers, but you’ll miss out on reach, frequency, and the ability to measure ROI.

4. Return. ROI can be complex to measure, but it’s often smart to start by answering a simple question: For the marketing dollars you spend, what kind of return to you get in terms of brand awareness and engagement opportunities? For example, programs such as webinars tend to have high return because prospects have proactively registered for the event, which already indicates their interest. Inquiries on your website from existing customers also offer high return; it’s lower for new customers. Searchable online catalogs tend to deliver good engagement opportunities because only your target audience would be using them, as opposed to general search engines.

5. Contacts and Inquiries. Do your marketing channels deliver contacts and inquiries in real time or is there a lag between prospects expressing interest and you finding out about it, leading to stale data? Also, do you get contact information for individuals and do you know their expressed area of interest? Work with media partners and choose channels that provide real time contact information containing useful data. This will get you that much closer to a qualified prospect from the beginning.

6. Branding. Branding and awareness are key components in the marketing equation. A highly visible brand helps build trust with customers and can reduce the time between inquiry and closing a sale because your brand is already recognized by prospects. Your company website, along with webinars and other online events and e-newsletter advertisements, offer solid branding opportunities.

A final recommendation as you prepare for 2014: Get a complimentary copy of the IHS GlobalSpec 2014 Industrial Marketing Planning Kit. This valuable and trusted resource will help you make the most of your marketing budget and choose the optimal channels to reach your goals and objectives. Download your copy today.

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Marketers Must Help Customers Through Their Buy Cycle

With pressure to demonstrate return on investment (ROI), industrial marketers often focus most of their attention and resources on the end of the buy cycle: the purchase decision. When you can build a marketing ROI case based on sales it’s easier to justify marketing expenses.

But there are two pitfalls to this approach:

1. The industrial buy cycle consists of distinct stages: needs awareness, research, consideration and comparison, and procurement. It’s important to use marketing to build awareness and connect with customers in these earlier stages or you probably won’t be a candidate to win business when decision time comes.

2. You can establish goals and track metrics for marketing programs that reach prospects in the earlier stages of the buy cycle. In this way you can use awareness and engagement opportunities as additional evidence to demonstrate ROI for your marketing efforts.

Why the early buy cycle stages are important
Fifty-six percent of industrial buyers don’t contact a vendor until at least the consideration and comparison stage of the buy cycle, according to the “2013 Digital Media Use in the Industrial Sector” research report. Nineteen percent don’t contact the vendor until they are ready to make a purchase.

Before making a purchase decision, buyers rely on a variety of digital resources to discover and research information about products, services and suppliers. They use this information to narrow down their options prior to even getting a vendor involved, which means you must be found in the early stages of the buy cycle and support customers with helpful, relevant content to make it onto a buyer’s short list of vendors.

Buyers use different information resources in different stages. During the needs awareness and research phases, the most frequently used resources are general search engines, supplier websites, online catalogs, and GlobalSpec.com. In addition to these online platforms, other resources, including colleagues and printed directories, are used in the consideration and comparison stage. During the procurement stage, the resource used most often is supplier websites, followed by online catalogs and general search engines.

Establish your presence on these digital channels to reach customers early in the buy cycle and you will be able to create a large pool of engaged opportunities for your sales team to work on closing.

Measure Success Throughout the Buy Cycle
Calculating ROI by tying sales to marketing programs can be an effective way to justify marketing expenses. But you can also demonstrate ROI when marketing supports customers in the earlier buy cycle stages.

For example, web page views, clicks, content downloads, video views, webinar attendance, and mentions or shares on social media can all be tracked and tied to your marketing efforts. These important metrics measure customer awareness, interest and engagement with your brand, products and services.

This type of ROI measurement is every bit as important as tying to sales, because without effective marketing in the early buy cycle stages, you won’t gain nearly as many opportunities for your sales team.

Keep in mind that early in the buy cycle customers want content that educates them and helps them do their job and move closer to a decision. Think about producing and distributing white papers, “how-to’s,” case studies, blog posts and product demo videos, rather than technical specifications or pricing and ordering information which can come later in the buy cycle. You can even measure the effectiveness of your content by tracking what gets downloaded, clicked on or shared the most.

It’s true that everyone wants immediate results. But the reality is that the industrial buy cycle can be long and complex, and might involve multiple decision makers. Plan your marketing to connect with customers early on in their buy cycle and you will have more engagement opportunities for your sales team to close in the later stages. You’ll also have the metrics as evidence to support your marketing decisions and justify your investments.

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