TMSA MEASURING YOUR DIGITAL MARKETING ROI€¦ · Content Marketing World TMSA Digital Marketing...
Transcript of TMSA MEASURING YOUR DIGITAL MARKETING ROI€¦ · Content Marketing World TMSA Digital Marketing...
Chris is SyncShow’s CEO and will be today’s presenter.
CEO
Berry Books
CFO
Vinny Viewer
Sales Director
Wendy Writer
Chris Peer, CEO & Today’s Presenter
With You Today
Why Track Marketing ROI?
● Marketing becomes an investment strategy not an expense = increased budget for marketing
● Greater marketing effectiveness and elimination of “whack a mole” style marketing
● Marketing to profit measurement = Top and Bottom Line Growth for your company.
● Marketers become HEROES
Benefits of Tracking the ROI of your Digital Marketing
Return on Marketing Investment (ROMI)Is the contribution to profit, attributable to marketing (net of marketing spending), divided by the marketing 'invested' or risked.
Source: Wikipedia
Is your marketing an investment or expense?
Revenue or Profit
If your company spends $100,000.00 on a digital marketing initiative and the digital marketing effort returns $1,000,000.00 in revenue, then the ROI = 10x.
If your profit margins are 40%, then the margin ROI (the true ROI = $1,000,000 x 40% minus the investment of $100,000.00) or $300,000.00 profit.
Common Reasons Why Companies Don’t Track Digital Marketing ROI?
● Fear of failure
● Perceived as being too difficult
● Perceived as being too expensive
● Lack of tools / data
● Lack of knowledge
Fear of FailureIf you are a marketer, you MUSTtie your efforts to profits or risk
being obsolete.
"Forget about the consequences of failure. Failure is only a temporary change in direction to set you
straight for your next success." -Denis Waitley
Marketing is a Science. You Will Fail. Embrace Failure and Move On.● Not every campaign, initiative or
effort will work as planned. Analyze, adjust, move on.
● Have key performance indicators (KPI’s) for everything.
● Continuously track, analyze and report on every marketing effort.
● Understand that you must test, retest and retest again. Keep changing things up to see what works and what does not.
● Encourage your team to take risks and embrace their failures. Nothing ventured nothing gained.
● If you cannot track it, don’t do it.
● Bring in an expert to be your guide.
● Set your team up for success.
○ Ensure you have the right tools
○ Clear communications
○ Accountability
○ Alignment with Sales
Too Difficult?
Measuring digital marketing ROI is easier than you think. Take baby steps and build
sophistication over time.
“The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.”
-Winston Churchill
Take It One Step at a Time
● Oftentimes you will depend on other departments for information, such as:
○ Profit margins○ Average order value○ Customer lifetime value○ Lead to Customer %○ Etc…
● Be patient and work with these departments for mutual success.
● When in doubt estimate○ If other departments
cannot provide the information needed, estimate the best you can.
○ Executive leadership is often appreciative of the insight and effort to tie ROI to marketing
● Once you know what to measure and how to measure it’s easier than you think!
Too Expensive?
Once you know how to define digital marketing ROI, the expense is irrelevant. It is the promise
of a return that matters.
2X+ Return In 12 Months or NO GO!
“In business there is no such thing as an expense. EVERYTHING you spend money on should be an investment.”
- Unknown
Lack of Tools?
No Excuses.Google Analytics. It’s free and easy to set up.
Include the cost of your marketing tools in the ROI equation.
“The best investment is in the tools of one's own trade.”
-Benjamin Franklin
Lack of Tools
You will need the right tools to effectively engage in a digital marketing strategy.
The following are the tools I recommend: (the cost of these tools should be
factored into the ROI calculation)
● Marketing Automation (Act|On, Pardot, Marketo, HubSpot. I prefer HubSpot)
● Google Analytics
● Basic spreadsheet program (Excel)
Enhanced Metrics Tools:
● Website Analysis: Insites- by Silktide, CrazyEgg, WebPageTest.org, Pingdom, Test
my Site, Google Structured Data Testing Tool
● Search Engine Optimization/Marketing Analysis: SEO MOZ, SEMrush
● Social Media & Email: HubSpot Professional or Enterprise
● SyncShow KPI Tracker
Lack of Knowledge?
Today digital marketing is rocket science! Get educated on how to build
a successful marketing program or bring in an expert.
“The interaction of knowledge and skills with experience is key to learning”
- John Dewey
Lack of Knowledge
There are many resources available to help you determine the right ROI driven
strategy for your organization. Provided below are some of my favorites:
● Inbound Conference
● Content Marketing World
● TMSA Digital Marketing Conference
● HubSpot Academy
● Digital Marketing ROI Calculator
● Good Reads:
○ How to measure marketing ROI
○ Refresher on Marketing ROI
“The interaction of knowledge and skills with experience
is key to learning”
- John Dewey
Data = Success
Understanding what to measure and where to acquire the required data are
critical components to your success.
“Marketing without data is like driving with your eyes closed” - Dan Zarella
DEFINITIONS
● SESSIONS: = Website visits
● S2LCR: Session to Lead Conversion Rate
● L2MQLCR: Lead to Marketing Qualified Lead Conversion Rate
● L2SQLCR: Lead to Sales Qualified Lead Conversion Rate
● LEAD: Anyone that engages with your brand via your website (calls in, completes a form,
downloads content)
● MQL: Marketing Qualified Lead: A lead that meets the profile of your defined buyer
personas.
● SQL: Sales Qualified Lead: A marketing qualified lead that your sales team has engaged in
conversation with.
● Buyer Persona: A stereotypical profile of your unique buyer target (age, gender, level of
education, pains, needs, expectations, title, type of company they work for)
● Customer Lifetime Value: Revenue driven from a typical customer for the entire lifetime of that customer.
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YOUR GOALS & OBJECTIVES(an example)
● Generate 5-10 sales qualified leads per month via the website
● Increase current customer sales growth with enhanced digital communications
● Establish a presence and create awareness in new markets (geographic or vertical)
● Increase website traffic by 50% in 12 months
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GOALS - April 1, 2018 – June 30, 2018
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AprilGoal
AprilActual
MayGoal
MayActual
JuneGoal
June Actual
Sessions 1,700 3,254 1,900 1,988 2,000 2,529
Leads 55 76 62 48 55 61
S2LCR 3.25% 2.34% 3.25% 2.41% 2.75% 2.41%
MQLs 3 17 4 5 3 4
L2MQLCR 6% 22.37% 6% 10.42% 6% 6.56%
SQLs 22 38 25 20 22 32
L2SQLCR 40% 50% 40% 41.67% 40% 52.46%
Customers 1 1 1 1 2 3
SUGGESTED GOALS - July 1, 2018 - September 30, 2018
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Above goals are based on:● Sessions are based on seasonality and historical data● All lead goals are based off of historical data but we will evaluate them quarterly to stay focused on any
large upsets or changes that may need to be made to be proactive about recommendations for your new website health.
● September S2LCR has been adjusted slightly to account for pause in SEO and lead generation campaign in August.
July Goal August Goal September Goal
Sessions 1,933 2,057 1,959
Leads 55 61 39
S2LCR 2.82% 2.98% 2.00%
MQLs 5 6 4
L2MQLCR 10% 10% 10%
SQLs 27 31 20
L2SQLCR 50% 50% 50%
Customers 2 1 2
How do I get this data?
KPI = Key Performance Indicator Where Metric
Average Website Sessions (Traffic) Google Analytics / HubSpot or other analytics software
Assume for an increase month over month based on marketing effort. Use this estimate for your ROI projection.
Average # of Leads per Month from Website (includes: calls, form fills, downloads, chat, etc.)
Google Analytics / HubSpot Track this month over month. Use HubSpot to identify source of the lead (Social, email, PPC, etc.)
Close Rate (%) Financial Software or CRM (HubSpot, SalesForce, Dynamics, etc.)
= Number of New Customers / Total LeadsEx: 10 new customers / 50 leads = 20% close ratio
Customer Value (12 months) Financial Software or CRM (HubSpot, SalesForce, Dynamics, etc.)
Total sales revenue and profit of the average new customer for the first 12 months.
Customer Lifetime Value Financial Software or CRM (HubSpot, SalesForce, Dynamics, etc.)
Total sales revenue and profit of the average new customer for the customer lifetime.
Session to Lead Conversion Rate Analytics / HubSpot Total number of leads (website conversions) / website session for that month = conversion rate. This should be 2-5% for B2B companies.
Making Sense of the Data.
KPI = Key Performance Indicator
Factor
Average Website Sessions (Traffic)
At SyncShow, we factor in a conservative % increase in website traffic, month over month depending on the scale of the marketing effort.Example: 5000 sessions per month
Average # of Leads per Month from Website (includes: calls, form fills, downloads, chat, etc.)
This should be between 2-5% (on average for B2B companies). Website Sessions x 2% = Total Leads5000 x .02 = 100 leads
L2MQLCR (Lead to MQL Conversion Rate)
Typically, we see the Conversion Rate from Leads to Marketing Qualified Leads to be about 40%Website Leads x L2MQLCR (40%) = MQL’s100 leads x .40 = 40 MQL’s
L2SQLCR (Lead to SQL Conversion Rate)
Typically, we see the Conversion Rate from MQL’s to Sales Qualified Leads to be about 50%MQL Leads x L2SQLCR (50%) = SQL’s40 MQL leads x .50 = 20 SQL’s
Close Rate (%) Factor in your proposal to close rate. (Let’s assume 60%)SQL’s x Close Rate = New Sales20 SQL’s x .60 = 12 New Sales
Making Sense of the Data.
KPI = Key Performance Indicator
Factor
Customer Value (12 months) Factor your new sales x new customer value in the first year.New Sales x AOV = Revenue12 New Sales x $20,000 = $240,000.00*this will be used to calculate the annual investment ROI
Customer Lifetime Value Factor each new sale x CLV12 New Sales x AOV = Revenue12 New Sales x $50,000 = $600,000.00*this will be used to calculate the compounding ROI
Profit Margin Factor in your profit margin from the Customer Value (12 months)Total Marketing Revenue p/m x 12 months x PM = Profit$240,000.00 x 12 x 20% = 576,000.00
Return on Marketing Investment
Example: Company spends $10,000.00 per month on marketing.Profits - Marketing Investment = ROI$576,000 - $120,000 = $456,000
EXPERT TIPS
● Every company is different. Use the formulas on the preceding slides as a guide.
● If the ROI calculation does not prove true, use the data to find out where the discrepancy is?
○ Are the average order values off?
○ Is the close rate different than the assumption?
● You must factor in your sales cycle. We typically recommend a 6-9 month base-building until results start to flow.
● Think long term!
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Long Term Return on Investment
It is critical to calculate the Customer Lifetime Value (CLV). True ROI may not be as dramatic in the first 6-18 months. However, when you calculate CLV, the value compounds year over year to define your true return.
Customer Lifetime Value = Revenue driven from a typical customer for the entire lifetime of that customer.
EXPERT TIPS
● Perhaps the most important KPI to track is your Session to Lead Conversion Rate (S2LCR). It should be 2-5%! If it is not then you should actively work to improve it.
● Use data to support and guide all marketing decisions when possible.
● Identify where, when and how all of your leads are finding you.
● Stop Doing, Keep Doing, Start Doing: use data to inform you of your future marketing game plan.
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ROI CALCULATOR
Click the link above to calculate your potential for digital marketing with SyncShow.
Still have questions about Measuring ROI?
SyncShow helps industrial companies synchronize sales and marketing to show results. With over 16 years of experience, we are a turnkey provider of lead-to-revenue solutions. We offer an unique alignment to the industrial buyer’s journey.
Call us today to learn more: 440.356.19031156 Linda StreetRocky River, OH 44116www.syncshow.com