Gauging the return on your marketing investment can be a very tricky proposition. Just how do you quantify things like brand awareness, publicity and market penetration? Let’s take just one of those qualities and try to assign a number to it. Brand awareness – how on Earth can you tell what level of brand awareness exists for your company? First of all, you have to define the parameters of the audience you’re measuring. Are you looking at brand awareness in the whole world? The US? Just your local area? Then you actually have to figure out how to measure that awareness. Will you use a survey? Where will you find respondents for the survey? How will you encourage participation in the survey? (And those last two questions suppose you actually decided to use a survey).
As you can see, trying to measure your marketing ROI can quickly and easily lead you down into an endless rabbit hole of questions, and the numbers you get at the end may not really provide much useful information. So just how do we gauge the ROI of our marketing efforts?
Temper your expectations
Because marketing ROI is so hard to quantify, you have to realize that whatever results you do get will probably appear underwhelming. For example, did you know that even if you’re fantastic at lead conversion, 95 percent of your leads will never pan out? Being considered a success when your failure rate is 90+ percent would make even a baseball player jealous – even they can only fail about 75 percent of the time.
So instead of focusing on the raw numbers, just try to keep those numbers trending up. Ensure that your numbers are improving every month by significant amounts. As long as that’s happening, then you’re doing something right.
The numbers you can’t deny: leads and lead conversions
Even though we can’t really quantify things like brand awareness, there are still two indisputable numbers that help you get a handle on your marketing ROI: leads and lead conversions. How many leads are you getting and what percentage of them are you converting?
The amount of leads you get will depend on the type of marketing outreach you’re using. If you’re investing in direct mail campaigns, you should expect a response rate of about 4.4 percent (again, temper those expectations). For internet marketing, you’re also looking at around 4 percent of site visitors becoming leads.
The average conversion rate is even lower: 2.35 percent across the board (some industries might have a slightly different average). The best companies might be able to achieve 5 percent conversion rates, but almost no one is achieving double digits.
How to maximize your own marketing ROI
You have to invest some money into your marketing efforts in order to be successful, but you don’t have to be spending big money. Marketing can be a very fickle thing, and spending too much of your resources on it can backfire in a big way; especially when you don’t have a good grasp on your ROI. Therefore, this provides yet another reason to embrace inbound marketing.
Do you have any idea how much a direct mail campaign costs these days? It is outrageously expensive, especially when compared to inbound marketing. With inbound marketing, you invest time and energy instead of money, and you invest it in content creation. And unlike a direct mail postcard, which will be discarded and forgotten, content can stay on the internet indefinitely; which means it will continue to provide value long after it has been published.
If you really want to get the most bang for your marketing buck, then inbound marketing is the way to go. If you’d like to learn more about how inbound marketing can boost your leads, please download our FREE eBook: How Inbound Marketing Drives Real Results.