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Demand Generation

Growth

How to Track the ROI on Your Growth Marketing Campaign

How to Track the ROI on Your Growth Marketing Campaign

The Next&Co Digital Media Wastage Report shows that 41% of the average company's marketing budget is wasted, with wastage being the highest among ecommerce, retail, and finance companies. 

Calculating your Return On Investment (ROI) is perhaps the most important thing you can do to keep your growth marketing spending on track. Knowing your ROI will help you:

  • Make value-conscious choices
  • Prove the value of your marketing to leadership
  • Justify your marketing budget for next year 
  • Choose which marketing channels to invest in 

This article will show you how to calculate your growth marketing ROI step-by-step.

Step #1. Set Up Ways To Track Your Marketing Success

You can't calculate marketing ROI without knowing what "return" you are getting. So the first step is to set up ways to track your marketing successes. 

Common ways to monitor your digital marketing campaigns include:

  • Google Search Console. Google Search Console helps you monitor your website's performance in search results. 
  • UTM links. You can use UTM codes to track how your website visitors browse on Google Analytics. 
  • Facebook Pixel. Facebook Pixel will help you track conversions from Facebook ads.
  • Social media marketing analytics platforms. Platforms like Buffer Analyze, Sprout Social, Hootsuite, and Zoho Social can help you analyze your social media marketing Key Performance Indicators (KPIs). 
  • Ecommerce analytics tools. Platforms like Hotjar, Kissmetrics, and Optimizely can help you analyze ecommerce KPIs. 
  • Customer Relationship Management (CRM) tools. CRM tools like HubSpot, Salesforce CRM, SAP CRM, and ZOHO CRM can help you analyze customer interactions.

It's best to set up these tools before you start publishing your marketing efforts.

Step #2. Gather Data

Next, sit back and start gathering data. It's best to monitor your marketing for several weeks or months if possible, as a longer data collection period will ensure your results aren't skewed by outliers.

Step #3. Calculate Your Marketing Costs

Then, calculate your costs. 

You'll need to take two types of costs into account:

  1. Direct costs

Direct costs are expenses that have a clear price tag and can be directly tied to your marketing and sales funnel. Marketing software, Paid-Per-Click (PPC) ad spending, equipment, marketing staff salaries, and freelancers are all direct costs. 

  1. Indirect costs

Indirect costs are expenses that aren't directly tied to your marketing but are still essential to make running the marketing department possible. Rent, electricity, and salaries from non-marketing staff (like receptionists or administrators) are all indirect costs. 

You may need to consult your accounting department to figure out your indirect costs. Once you have your figure, add it to your direct cost figure to get your total marketing spend. 

Step #4. Calculate Your Marking Returns

Now it's time to calculate your marketing returns, and there are several approaches you could take here. 

If you want to simplify things, you could take your entire net income figure for a given period and attribute 100% of it to marketing. 

Or, if you want to be more precise, you can go through your marketing channels one-by-one and calculate how much revenue your company earned as a result of it. This is easier with some channels than others. Some ad analytics, paid media, and referral marketing tools, for example, will help you calculate how much revenue your brand earned from ads. Sales from search engine marketing, social media marketing and content marketing, on the other hand, are harder to attribute. 

Whatever method you choose, you should finish this stage with a clear figure.

Step #5. Execute the ROI Formula 

The final step in measuring digital marketing ROI is executing the following ROI formula:

ROI = (marketing revenue - cost of marketing) / cost of marketing

For example, if your total revenue figure was $45,400 and your total marketing costs were $12,300, your ROI would be 2.69.

If your ROI figure doesn't look right, make sure you have only included marketing returns and costs from a single, clearly defined period (like quarter one or 2022, for example). A common mistake marketers make is including a year's worth of an expense rather than just the cost in a set period. 

Other KPIs to Watch with Growth Marketing 

  • Customer Lifetime Value (CLV) = average order value x purchase frequency rate x average customer lifetime
  • Customer Acquisition Cost (CAC) = (cost of sales - cost of marketing) / number of new customers acquired
  • Conversion rate = (total conversions / total visitors) x 100
  • Cost-Per-Click (CPC) = total amount spent / total clicks
  • Open Rate  = (number of emails opened / number of messages sent) x 100
  • Average Transaction Value (ALV) = total sales / number of transactions

Tracking other KPIs and presenting them alongside your marketing ROI can give the ROI figure more context. It can also help you explain fluctuations in your ROI across multiple periods. 

Calculating Marketing ROI, Growth Marketing, and Matter Made

Measuring marketing ROI will help you quantify your growth marketing efforts, build a strong PLG funnel, and analyze your digital marketing campaign efficiently. Naturally, knowing your marketing ROI can help your growth marketing strategy succeed long-term.

Want to embrace growth marketing but don't know where to start? Let's talk. 

Demand generation is a powerful tool to use in your B2B marketing strategy. It’s a full-funnel approach that engages customers and prospects at every stage.

Demand gen works by creating targeted interest to develop value for your brand. By providing essential information at the moment of need, demand generation strengthens relationships. This approach works at each stage of a prospect or customer relationship.

How Does Demand Generation Work?

A properly developed demand generation strategy uses multiple approaches. It uses strategic content, strategic messaging, data, and buyer personas to align customer needs with valuable insights.

Demand gen positions your brand as a provider of valued information at each stage. It’s the glue that connects you to your customers.

There are several key stages to demand generation. Below we will delve into each and show how it can transform your marketing strategy. The stages are:

  • Raising Brand Awareness
  • Developing Content
  • Nurturing Relationships for Sales
  • Retaining Customers

One important note: Demand generation is not lead generation. Lead generation is a narrower, focused strategy designed to collect qualified leads for sales teams to pursue. One example is collecting names and contact information on an online form.

Demand generation is a more comprehensive approach that nurtures relationships at each stage. While it uses many of the same tactics as lead generation, it’s a broader strategy.

Raising Brand Awareness

One of the most essential tasks marketers need to complete today is to develop brand awareness. Today’s customers want to relate to brands they frequent. They expect brands to know them, their needs, and interactions with your business.

Brand awareness leaves buyers with a lasting impression of your company. It fosters trust, confidence that the solutions your company provides are reliable, accurate, and impactful.

Brand awareness has multiple components, including:

  • A clear brand identity helps you differentiate your company from competitors. Your identity should provide customers with easy recall of who you are and what you’re about
  • A go-to-market strategy based on research that articulates what you’re going to sell and how. Demand marketing can be seen as a way to prove whether your assumptions are correct. It can also help to adjust based on data and results
  • Buyer personas articulate who you’re trying to reach and what characteristics they share. Identifying and developing brand personas lets you understand who you’re approaching and how
  • Thought leadership helps position your brand as an expert and authority within your space. You want people to think of your brand when they think about industry leaders
  • Strong reviews management, which includes encouraging customers to leave reviews and responding appropriately to customer feedback
  • Social media presence on the right platforms. Leveraging social media lets you set the tone and messaging for your brands. It’s a powerful way to communicate broadly

Developing Content

Your content strategy is at the core of your demand marketing approach. You want to develop content that addresses customer pain points and answers critical questions.

Content development should occur for each phase of the sales funnel. By identifying key needs at each phase, you’re able to position your brand as authoritative and valuable.

Content should answer the questions that buyers will have throughout the customer journey. The information should also be displayed in multiple formats. Today, for example, video is an increasingly important medium for gaining information and answering questions.

Among the content options are:

  • Blogs that educate your website visitors and drive SEO, with keyword-optimized content. Your blogs should be about topics of keen interest to customers and prospects.
  • Email marketing gives leads multiple opportunities during a campaign to engage with your brand. Email marketing can answer questions and speak directly to their needs while acknowledging actions already taken. If resources permit, this content can be personalized to provide more resonance
  • Conversion optimization which uses your website to gain information about prospects. At strategic points, visitors should be encouraged to seek more information. Gated content such as white papers, product guides, or videos allows you to secure contact information. Investing in website user experience (UX) tools can help to ensure visitors navigate your website to maximize leads
  • Paid advertising increases your presence and can be highly targeted based on desired customer demographics. Paid ads on both search engines and social media attract visitors and facilitate a larger prospect pool
  • Conversational marketing using chatbots and other technology lets you connect with visitors. Automated and live engagement lets you answer questions and add value to the visitor experience

Nurturing Relationships for Sales

Leads are critical and sales teams are eager to connect with prospects, especially those of high value. However, with demand marketing, there’s much more than a marketing-to-sales handoff.

Throughout the sales process, marketing tactics can deepen the relationship and assist in closing deals. Sales enablement tools include:

  • Case studies, with narratives from actual customers about the work you’ve done and solutions you’ve provided. Compelling case studies build trust and provide real-world examples of your brand’s impact
  • Testimonials are narratives provided by your customers, ideally, those who are similar to your target audiences. They are quick statements that reinforce your value and worth to a customer’s peer
  • FAQs and fact sheets offer details in easy-to-digest formats. FAQs typically use a question-and-answer format for commonly asked questions. Fact sheets are often more detailed with specifics about products and services

Retaining Customers

Retaining customers is essential for repeating business, advancing your brand’s reputation, and extending the customer relationship.

There are many ways you can provide services that focus on retention, including:

  • A knowledge base where customers can share solutions and insights and learn from each other
  • Customer support that includes ticketing tools and transparency to track inquiries and provide timely service
  • Incentive programs for customer referrals can generate new business while providing discounts for existing customers
  • Customer-only content such as first-to-know emails, special discounts, and promotions tell customers how valued they are

Demand generation marketing connects you to customers at every step of their journey. It’s the right way to engage, provide value and build credibility for deeper long-term relationships and more opportunities for business.

Ready to drive efficient demand?

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