Not sure? If you asked them what it costs to bring in every new customer, would they know – or would it be a guess not really grounded in actual numbers? Do they know your cost per sale by individual channel? What about cost per lead? Do they know lead conversion percentage at every step of your conversion funnel?
I recently spoke to a roomful of small business CEOs and asked them this question:
“How many of your marketing teams are tracking results and computing cost/action from every effort?”
Half of them believed their marketing team was tracking results. But some said their team may not be computing cost per sale or cost per lead by effort. Another maybe 20% weren’t sure if the right results were being tracked. So I asked those CEOs:
“If your marketing team isn’t tracking results and computing cost/action, why aren’t they?”
Their own comments led the CEOs to realize whose problem this really was . . .
“I’m not sure if they are. I never see any reports like that.”
“I’ve never asked.”
“How would I know if they are or they aren’t?”
I suggested that when the CEOs return to their office, they call a meeting with their marketing team. “Tell them you just went to a workshop where the speaker suggested that every marketing team should be regularly tracking results and computing cost per action. And you want to start seeing a monthly report of whatever results your team can start with.“ Ask them, “What are we looking at now?” to get the discussion going.
Review Monthly Website Traffic, Leads, and Sales by Channel
If your website is using Google Analytics, the tool will show you where your traffic is coming from by channel. If you set up goals, Google Analytics can also track completed lead forms by channel. And if you’re running an ecommerce website, Google Analytics can also track sales by channel. Once you gather the numbers by channel for traffic, leads, and sales, you can then equate any costs to the efforts.
So if this is so easy, why doesn’t every marketing team track the results of their efforts and measure cost/action? There are usually at least 5 reasons:
1. The “Marketing Production” assembly line
Some Marketing teams don’t see beyond just “getting the project done.” They focus on completing the steady stream of marketing activities to keep things moving.
They’re not planning how to track results – because it’s not a priority.
Maybe no one thinks it’s part of the job. Maybe they’re not sure how to do it.
So no one really does an analysis — through leads and sales — to see what’s working and what isn’t.
There’s no Testing to learn what might work better — because that would get in the way of “getting the projects done.” “We don’t have time for that.” So, no learning happens.
The Marketing Production assembly line just keeps going.
2. “We need something new”
Is your team always focused on the next campaign? Are they always looking for “something new”?
You and your marketing team will get tired of campaigns LONG before your audience ever will.
I’m working with a client that has completely ignored results of highly successful email campaigns in the past – in favor or “something new.” The client markets a product that renews each year. He believed his audience would remember what his message was the prior year, and he thought he needed “something new” each year to attract attention.
Some of his successful email campaigns were generating 10 times the sales of other campaigns. But his team was always creating something new, rather than building on their successful email messages.
The agency they were working with didn’t focus on reporting from Google Analytics. They never enhanced their email campaign reports with actual website results from Google Analytics. They found challenges with tracking some types of sales — so they gave up on reporting sales at all.
3. “We don’t really track results”
Maybe the boss doesn’t ask for reports, because he or she doesn’t want to see that level of detail.
It’s possible the boss just assumes that Marketing knows what they’re doing. But what if your Marketing team isn’t tracking results and equating cost/action — because no one has made it a priority? Maybe they don’t understand what tracking results and comparing cost/action could do for them.
By not tracking how effective your marketing is or isn’t:
You miss incredible learning opportunities.
You miss ways to improve and get more from every dollar you spend.
You also miss opportunities to PROVE how effective your marketing is. And you perpetuate the perception of marketing as just an expense, with a team that may not know how to drive positive ROI. (If it’s always a struggle to determine your marketing budgets each year, this is why.)
When the boss asks for reports or more specific tracking, it’s an OPPORTUNITY — for your marketing team to prove their expertise and illustrate how smartly they’re managing the company’s budget.
They should never brush off this type of request, try to talk you out of it, or just forget about doing it.
As the boss, why not ask how results are being tracked? Schedule a meeting to go over the numbers — and let your Marketing team prove they do know what they’re doing. If they’re not sure how to begin, there may be someone on the team willling to learn Google Analytics. Or you can bring in a consultant to create some reports and train team members on tracking and gathering the numbers.
4. “We can’t measure that,” “I’m not a numbers person,” or “We’re not looking for volume”
You can measure just about every marketing tactic in some way. The key is to take a step-by-step approach, so you see exactly what happened. Most email systems, social media sites, and websites have simple-to-use analytics.
Do your marketers cringe at the thought of marketing analytics? Even if someone isn’t a “numbers person,” analyzing most tactics doesn’t really require much math at all. The sooner your team becomes familiar with the metrics — and gets over their allergy to “marketing math” — the faster they’ll really jump-start your results.
Analytics track how visitors use your website — what pages they visit (and don’t visit), actions they take (and don’t take), and where visitors come from. Your team is missing opportunities – and problems – by not reviewing your visitors’ behavior, even if you’re “not looking for volume.”
5. Over-reliance on “philosophy” or “best practices” — versus Testing and real results
Marketers, agencies, freelancers, copywriters, graphic designers, web developers – we all have our particular knowledge or “philosophy” of doing things based on our experience. When we can continue to build that knowledge by seeing actual results, it makes each of us that much more effective.
- But when a marketer doesn’t base philosophy on tested, proven results – and when our knowledge doesn’t constantly grow – that philosophy isn’t leading to the most effective marketing.
What about “best practices”?
Best practices are where you start, if you’re using a new marketing tactic or working with a new client.
But as soon as you see actual results, you’ll see exactly what works for YOUR product or service to YOUR audience.
Experience is highly valuable – but it’s not a substitute for actual results from your particular audience.
That’s because every audience type is different, each will buy a product or service for a different set of reasons, and the effectiveness of different tactics is always changing.
No matter your philosophy, knowledge of best practices, or experience – you may still spend marketing budget ineffectively if you’re not actively testing, tracking, and analyzing results.
Each of these 5 reasons is preventing your Marketing team from generating the most effective marketing ROI. Without a focus on results and cost per action, they don’t know what’s really working and what isn’t. So they tend to continue with programs that aren’t as effective as they could be – and may not recognize the top-performing campaigns they should be using.
Marketing can – and should – show a direct relationship between marketing activities and sales increases. The more quantifiable you can make that relationship, the more cost-effective your marketing programs will be.
Clearly, the CEO or head of marketing has a key role here. In fact, 4 of the 5 reasons above may be actually caused by the boss – and 4 out of the 5 are easily solved by the boss.
So find out today if your team is managing marketing based on results and ROI. Ask to see reports regularly that prove it. Your marketing team — and your marketing ROI — will both be better for the effort.
Excerpted from our new book, “The Results Obsession: ROI-Focused Digital Strategies to Transform Your Marketing”, now available on Amazon!
Learn more about The Results Obsession and see the Table of Contents
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