How do you measure the ROI of your marketing strategy?

To measure the ROI of a marketing strategy effectively, first define what success looks like for your specific goals, whether it’s increasing brand awareness, boosting conversions, or enhancing customer loyalty. With clear objectives, you can identify the right metrics—like conversion rates or cost per acquisition—that directly tie marketing activities to financial outcomes. Knowing your customer lifetime value will significantly influence how much you are willing to invest into marketing. Consistent tracking and analysis of metrics will reveal if your efforts are on target, allowing for strategic adjustments. Success isn’t just in hitting metrics but in seeing measurable impact that aligns with your broader business vision.

The best marketing I’ve seen seizes the moment at the right time. If the right opportunity for emphasising your USP arises, keep the metrics simple and learn by action (Don’t get caught by analysis paralysis). Better yet if you can have strategies ready in anticipation for a particular moment in time this allows you to take full advantage of the window of opportunity.

Without a clear understanding of your marketing efforts' ROI, it's challenging to determine if you're generating revenue or wasting resources. One particular area we focus on is tracking the ROI of our Facebook and search ads campaigns. By monitoring key metrics such as CTR (click through rate), CPC (cost per click), and conversion rates, we can determine the effectiveness of our campaigns. Another area where we focus on ROI tracking is email campaigns, especially those with limited-time offers (LTOs). By analyzing the performance of these campaigns we can determine which campaigns are most effective at driving conversions and revenue growth. This helps us to make data-driven decisions about which campaigns to invest more resources in.

Yes, Defining your goals and metrics is the first step to measuring the ROI of your marketing strategy. However, I would clarify that the metrics measured should go beyond…”How many sales???” Or “How many clicks???” The metrics should also focus on the “WHO” - “WHERE” - “WHY”. Who is making the purchase? Who is engaged with your marketing message? Who is responding to your strategy? Where are they engaging with your message? Where are they in the “journey” with your strategy? Why are they engaged by your marketing strategy? Why did they respond to your strategy? Yes, SALES and GENERATING REVENUE are always going to be crucial and the most important metric. However, the WHO - WHERE - WHY will help you prepare for the “The NEXT”

What is your goal? Building brand awareness? Hitting a niche in the market? You must define success from the beginning. For example, brand awareness strategies create different KPI's and strategies than a traditional pay-per-click campaign on Google. A single ad must be strategically designed with the entire marketing strategy in mind and measured accordingly. Otherwise, you will draw the wrong conclusions from your ad campaigns and lose focus on the primary goal = driving business growth

By leveraging Facebook Ads Manager and Google Ads to monitor key metrics such as CTR, CPC, and conversion rates, we can determine the effectiveness of our campaigns and make data-driven decisions about optimizing our ad spend. For example, if a Facebook ad campaign generates 100 clicks and 10 conversions but costs us $200 to execute, we can calculate the cost per click and cost per conversion to see how cost-effective the campaign is. By tracking key metrics for these campaigns and adjusting our strategies accordingly, we can ensure that we're using the most effective channels and campaigns to drive revenue growth.

I am a BIG FAN of keeping it easy - specifically, EASY TO UNDERSTAND, EASY TO COLLECT the data, and EASY TO ANALYZE. I believe this mindset will allow you to consistently collect and analyze the data quickly and help you prepare for the NEXT. In regard to surveys and collecting customer feedback, I highly suggest utilizing ASKNICELY survey system. Very simple to execute and the feedback from customers analyzed at various levels that can provide you several ways to use the data.

Once you've identified the marketing channels and campaigns with the best ROI, you can then focus on scaling those efforts to drive even more revenue growth. This involves allocating more resources to the most effective campaigns and investing in strategies that have already demonstrated a positive ROI. Scaling your marketing efforts can help you to achieve exponential growth and expand your business. However, it's not a one and done. You need to keep tracking your ROI as you scale in order to ensure that you're still generating a positive return on your investment

While it is crucial for every business to INCREASE THEIR REVENUE, there maybe other factors beyond revenue that can be considered “ROI” - Return On Investment. It all goes back to the first question…”What Are The Goals Of Your Marketing Strategy?” Yes, ultimately, your strategy is to drive revenue, however, there will be times when the first step in the process could be… *Increase Engagement (Brand Awareness) *Increase Customer Ratings (NPS Survey) *Increase Customer Interest (Build A Prospect Bank) These all can be a metric for your marketing strategies ROI

Some other things to consider are: What is your Customer Lifetime Value (CLV). CLV refers to the total amount of money a customer is expected to spend with your business over their lifetime. By tracking CLV, you can determine the long-term profitability of your marketing efforts and make informed decisions about which customer segments to target and which channels to invest in. Retention and customer churn rate are other important metrics to consider. Retention refers to the percentage of customers who continue to do business with you over time, while customer churn rate refers to the percentage of customers who stop doing business with you over a given period. By tracking these metrics, you can identify areas for improvement.

ROI is just one piece of the puzzle. Focusing solely on ROI can lead to short-sighted decisions. Remember Jeff Bezos's approach: "We don’t focus on the optics of the next quarter, but on what is going to be good for our customers and business over the next decade." Incorporate long-term metrics like brand loyalty and customer satisfaction to ensure sustainable growth.

A/B testing, also known as split testing, is a technique that can help you improve your marketing strategy by comparing two different versions of a marketing element, such as an email subject line, a website landing page, or a social media post. By creating two versions of the element, you can test which one performs better in terms of achieving your marketing goals, such as click-through rates or conversion rates. For example, if you're creating a new email campaign, you could create two versions of the email with different subject lines and send them to different segments of your email list. By testing different variations and analyzing the results, you can identify what works best and optimize your marketing efforts for improved ROI.

Your marketing strategy should be a journey… As I always remind business leaders… “Success is a MARATHON NOT A SPRINT…” and with that, you should always be reviewing your marketing strategy throughout the plan’s execution to ensure the strategy is moving in a positive direction hitting the “mini goals” you established. The “Set It & Forget It” mindset doesn’t work - for a marketing strategy to be successful, you need consistent and frequent review of the strategies results. This will help you make the necessary adjustments to the plan to ensure the marketing strategy exceeds the plan’s goals.