To prove your Marketing Return on Investment (ROI), it is critical to set the right expectations, marketing goals and objectives from the start.
In this blog post, as part of our Proving Marketing ROI blog series, we take a look at how to get a more holistic view of your marketing activities by tracking micro and macro marketing metrics.
Marketing at the end of the day has to lead to results. That’s why Marketing ROI is often an important metric for many businesses.
It doesn’t make much of a difference how creative you get with your strategies if you don’t end up with any results for those strategies.
The problem, however, is, not all marketing activities are easy to track, measure and attribute to a sale.
There are several resources on how to calculate your marketing ROI. However, if you haven’t set up ways to track your marketing activities, I would argue that calculating your ROI is premature at best and, at worst, could be a demoralizing activity.
If you are interested in improving your marketing ROI, then you need to start by tracking your marketing activities.
Tracking marketing activities accurately calls for the need for monitoring smaller events that lead to a more significant event and not just the big event.
To achieve this, it’s essential that for every marketing activity, you set up metrics to track results along the way and not just for the big sale. The truth is, a sale usually happens as a result of different activities, and it’s often not only one activity.
Setting Marketing Goals: Treat All New Marketing Activities as Tests
Having the right perception when you run marketing campaigns makes a big difference in how you track and measure your efforts.
There is no full-proof marketing plan, message, activity, or channel.
With that said, it’s not to say that marketing activities shouldn’t happen in concert with data. Understanding your target audience, including the channels that they use, historical campaigns that have worked for others, and how that aligns with your core business can make a campaign more successful.
Keep in mind that you have to treat every campaign like any great scientist would with any experiment.
You have a hypothesis, you try out the hypothesis in the form of a marketing campaign, and then you let your audience decide if you are right or wrong.
When you approach your marketing campaigns as an experiment, it becomes less about seniority, gut feelings, or hurting anyone’s feelings. It’s simply data.
Think of all your campaigns as tests!
As with every test, you will have some winners and some losers. When business leaders think of marketing campaigns this way, marketing teams are more likely to feel empowered to do more, in turn leading to more creativity.
How to Uncover Why Your Marketing Isn’t Working
A question that I get all the time is, “why is my marketing not working?”
This question is so popular that even the stranger that I strike up a conversation with during an elevator ride wants an answer when I don’t fully know their business.
And I often ask, “what were your goals for your marketing activity?”
Then most people answer in two ways.
One way that people often answer this question is to give a general answer, such as, “I want people to buy my service or product.”
The second answer that most people give, which in my view are much more honest, is, “I didn’t really set up any goals.”
For the second group of people who didn’t set any goals, I often don’t have to do much explaining on why they do not see results from their marketing efforts. By acknowledging that they didn’t set up goals, they identify on the spot what they did wrong.
On the other hand, the first group of people who mention that they had a goal of wanting to gain new business, we often have to dive into a more in-depth conversation.
Start with The Right Marketing Goals and Track the Right Metrics
For every marketing activity, set your goals and objectives, keeping in mind that not every marketing activity will lead to a direct sale.
Some marketing activities today will lead to a sale in two years. Brand awareness marketing activities tend to fall into this category.
They help people know about your brand, but it may not lead to a sale right away because the audience may not be looking for something to buy at that time.
Essentially, if you run a branding campaign and then complain that you didn’t make a sale, you are not setting the right goal for that campaign. A branding campaign, for instance, should be tracked by the visibility that you get for that campaign and not necessarily a sale.
Lead generation campaigns on the other hand could be tracked based on the number of leads that you receive, and the number of leads that convert to a purchase.
Does it mean that if you want more sales, then you should ignore branding campaigns and just focus on lead generation campaigns?
Unfortunately, not. We all wish it were that easy.
You can tie branding campaigns to sales, but their sales effect may not be immediate.
If you’ve ever bought anything off the shelf of a grocery store because the brand sounded familiar or remembered a TV advertisement about that item, that’s how it works.
It’s not that when you see the TV commercial, you’ll jump out of your couch, put off your TV and walk to the store to make a purchase.
In this scenario, you may not even need that item until a few years later, but when you do, and you are faced with a decision while standing at the shelf, there is a chance that a jingle that’s buried in your brain will do the trick.
Manage Expectations for Measuring Marketing Goals
The main issue with tracking the return on investment for marketing activities has to do with not monitoring the right type of metrics.
We can spend a lot of time diving into the specifics on the types of metrics to track for the different marketing channels.
For example, what kind of digital marketing metrics should you track?
What about content marketing metrics?
Are email marketing metrics all about clicks?
In our subsequent posts on proving marketing ROI, we’ll take a granular look at the different types of marketing metrics to track.
For this post however, we’ll focus on a high-level approach to categorizing your metric types.
We can categorize marketing metrics into two broad categories: macro metrics and micro metrics. Many businesses tend to focus on tracking macro metrics.
What are Micro and Macro Marketing Metrics?
Macro marketing metrics are metrics directly tied to your big picture business goals, such as a sale or business growth.
Micro marketing metrics are metrics that lead to you achieving your macro marketing metrics, such as a sale.
Basically, a micro metric causes a macro metric, which means micro and macro metrics have a cause and effect relationship.
The illustration below shows the connection between a macro and a micro-marketing metric.
The connection between Macro and Micro Marketing Metrics
Examples of Macro and Micro Marketing Metrics
For almost all businesses, the primary goal is for someone to make a purchase. Tracking a new sale or a close win is a macro metric.
The question is, what about all the marketing activities that do not lead to a sale? Are those activities not worth tracking?
This where your micro-marketing metrics come into play; your micro metrics will be metrics that contribute to the ultimate goal of getting a paying customer but may or may not immediately lead to that.
An easy example is someone subscribing to your blog.
The number of blog subscribers that your company has is indicative of how much your brand’s perception as a knowledge source is growing.
While blog subscribers can eventually become customers, you need to give yourself the chance to track your blog subscription goals and categorize those as wins even if it’s not resulted in a sale yet.
If you find that you are meeting a lot of your micro-goals or metrics but not necessarily the macro metrics that you can attribute to a sale, it signifies that there is a disconnect in your process.
The only way to know what’s missing in the steps is for you to track all the micro metrics.
Below is a simplified example of a customer journey for someone who started as a blog subscriber.
All metrics such as blog subscription, webinar registration, e-guide download are all micro metrics that lead to the bigger goal of getting a sale.
As mentioned, if you are overlooking these metrics, you are less likely to find out when there is a break in the process.
Sample Customer Journey as You Track Marketing Activities
More Examples for Tracking Marketing Macro and Micro Metrics
The table below shows examples of the types of micro and macro metrics that you can track.
|Metric Type||Tracked Metrics|
|Macro||Number of demo requests or trials||Number of close-win and close-lost deals||Number of active users|
|Number of pipeline deals (opportunities)||Customer churn rate||Average customer acquisition cost|
|Micro||Number of blog Subscribers||Number of content downloads||Number of social media followers|
|Number of webinar registrants||Number of website visitors||Email engagement rates|
Key takeaways on tracking the right marketing metrics
- While we’d love to ignore the micro metrics and focus on only the macro metrics directly tied to a sale, we’ll also be doing ourselves a big disservice.
- If you track your marketing ROI, looking at your metrics more holistically, you are more likely to identify real gaps in the process.
- Certain marketing activities are simply not the fast track to a sale. A typical example is developing a blog. It’s a long-term strategy that will garner results over time. Your blog posts will age and, in most cases, gain better SEO credibility.
- By setting the right expectations from the start, you stand a better chance of tracking your return on your marketing investment within the appropriate parameters and time frame.
Next, in the Proving Marketing ROI blog series, we’ll take a look at specific marketing metrics to track for each marketing channel.