Trevor Gunstream
You’ve heard the mantra, “you can’t manage what you can’t measure”. As is often the case, when budgets are evaluated or times are tight, one of the first line items to be cut from the budget is marketing expenses. Why? Because you might not be effectively measuring it, and therefore, not able to effectively manage it and analytically communicate outcomes. Regardless of whether or not you’re finding success in your current marketing efforts, improvement will come from a clear understanding of some basic data.
To have a cohesive and unified vision for growth, marketers need to understand the business owner’s objectives; What are they trying to accomplish? What will be driving their decisions? What information do they need? And then communicating that information in a common language.
Is bottom line growth important to your company? I know what you’re thinking. “Why yes, isn’t it for everybody?” Then look at marketing as growth investments and develop a system to monitor and relay the results as such.
Here are five tips on how to bring better analytics into your small business’s marketing metrics, for the purpose of making informed company growth investment decisions.
1. Start with “Why”. Ask yourself: 
- Who is my buyer?
- What do they want?
- What is the best way for me to tell this type of buyer about our product or service?
- Where will I find these people and tell them in a way that they will want to listen to?
- What is my expectation for certain mediums? Example: am I using Facebook to gain new clients, or to showcase community support? Be clear about why you’re doing what you’re doing, so you can measure it accordingly.
2. Now that you know exactly who you’re going to target, what you’re going to say, and where you’re going to say it – you can create your marketing budget based on tactics, or “campaigns”. Your budget needs to be developed based on this data, not “it’s what we did last year”. Monthly you should review the marketing budget to determine if you’re on track; make notes so you can remember what you were thinking for later review and for next year’s planning. Don’t forget to consider timing when creating your marketing budget. Utilizing a cash flow budget will help you understand when you have the resources to make certain investments. Remember to leave some room in the budget for contingencies. Opportunities may arise and you need flexibility -10% is generally a reasonable amount.
3. Now that you’ve developed some fantastic marketing initiatives, you need to identify how you’ll capture the data for later analysis. This may be an industry Customer Relationship Management (CRM) tool that you have already available to track every lead, every call and every email to determine how the prospect found you. Tie them directly to a “campaign”, even if the campaign is “client referral”, or “online directory”. Clients find you a number of different ways and you want to track every one of them. If you don’t have a CRM system, consider a free source such as Zoho.com. Commitment across all lines through the company to gather this data must be encouraged. That might mean simply keeping an excel list that is then sent to one person for data input.
4. If you have a robust CRM system, it may generate reports such as: lead by campaign type, conversion ratios, return on campaign investment, etc. If not, you can utilize a ROI spreadsheet to input campaigns by name, amount invested, and revenue created. Some businesses may have transactional revenue and others may have recurring revenue (ongoing service for a period of time). If the latter is the case, try to identify what the net present value is for the recurring or relationship revenue. In the recurring revenue tool provided, a five year time frame with a 10% discount is assumed based on a high likelihood of recurring revenue. If there is more risk of the relationship income not coming to fruition, increase the discount rate.
5. Now that you have the data, examine it for the following
- Return on investment; What efforts yield the best return?
- Lead Generation; What efforts yield more traffic?
- What campaigns drive high quality leads into your business?
With this information, along with other data from Google Analytics, Social Media Metrics, and Newsletter open rates to name a few, you’ll be armed to lead a conversation about smart growth. Click here for the instructions on how to fill out the recurring revenue tool, and here for the transactional revenue tool.
Speaking of social media metrics – not sure how to track results for your company? Check out this article from Social Media Examiner for some simple to manage ideas.