Blog Post

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. 

Blog Post

Demand Generation

B2B (Business-To-Business) and B2C (Business-To-Consumer) are two terms that often come up in the growth marketing world. You’re likely already familiar with these terms. 

However, knowing the difference between B2B and B2C and knowing how marketing strategies are different for each is another matter.

Marketing to B2B audiences and marketing to B2C audiences require different approaches, and that’s what this article will delve into. You’ll learn how to build a marketing strategy that makes sense, whether your focus is on B2B or B2C.

Customer Relationships

The first difference in strategies is noticed in how customer relationships are approached. Digital marketing, in general, has a big focus on building relationships with customers, and the way this is approached varies between B2B and B2C strategies. 

While B2C marketing likes to zoom in on personal relationships, B2B marketing is less intimate and has what could be called a "transactional" focus. Building long-term relationships take the spotlight for B2B marketing strategies, and the attention is more sales-oriented in B2C marketing. 

Keep in mind that both require customer services and good lead generation to be fast and effective. A "Speed to Lead" approach is essential.

Branding

B2B marketing takes a very different stance on branding than B2C marketing does. B2B focuses on positioning, whereas B2C is more concerned with messaging.

For B2B, good positioning is what makes you stand out among the competition and attract your audience.  Positioning is about more than branding; it’s about perception. It encompasses various elements — from content marketing to branding and social responsibility.

On the other hand, B2C marketing is concerned with what your target audience thinks about you. What does your company stand for? What does it support? People who feel they can relate to your brand are more likely to buy from you. 

Ad Copy

Marketing strategies also diverge for B2B and B2C when it comes to ad copy. B2B companies need to take a professional approach, while B2C companies have the freedom to be more playful and emotional.

Successful B2B marketing ad copy should stick to terms that their audience is familiar with and avoid being frivolous. B2C ad copy should speak the same language as its target audience.

Audience Targeting

The way B2B companies approach audience targeting is also different from how B2C companies do it. To build effective B2B marketing campaigns, it’s important to find a niche and make that the focal point of all marketing efforts.

B2C marketing is more funnel-focused, and this funnel will consist of awareness, interest, desire, and action. A PLG (product-led growth) funnel can also be quite useful. 

Traditional marketing can come in handy but requires a good understanding of existing customers and proven ways to generate leads. 

Using marketing automation software (like HubSpot) can make audience targeting more effective and less frustrating, especially when trying to stay focused on results rather than the small things that can distract your marketing team. 

Sales Cycle Length 

The sales cycle length for B2B marketing is, in most cases, longer than it is for B2C marketing. This is because the decision and approval process requires multiple signatures, so potential customers might need more encouragement to take the final step and make a purchase.

More lead nurturing is required for B2B companies to get the sales they want, and user experience is an important factor here. If customers don’t get the attention they need, they’re more likely to move away and support other businesses. Customer service is a prime part of the B2B sales funnel. 

The B2C sales cycle often requires less input from salespeople, though this varies widely across industries and audiences. 

Emotional Investment

Generally, B2B marketing is far less emotional than B2C marketing because the customers are more calculating. They are driven by evidence of performance and numbers. B2B marketing, therefore, tends to be more information-focused.

B2C marketing calls for more creativity, entertainment, and emotional investment. Customers are more focused on achieving happiness or satisfaction and make more impulsive decisions.

Paid media campaigns can be useful tools for building emotional investment in both B2B and B2C marketing.

Marketing Channels

B2B companies and B2C companies have different marketing channels to choose from when it comes to their marketing efforts. For B2B marketing to work, the challenges of the audience must be addressed, as well as their needs and relevant interests. For this, Search Engine Optimization (SEO) is crucial.

Other channels that are fruitful for B2B include PPC (Pay-Per-Click) advertising, referral marketing, content marketing, email marketing, and social media channels.

B2C companies can use outdoor advertising, influencer marketing, traditional advertising, and digital marketing strategies. Search engines and social media also play a big role, with platforms like Twitter, Instagram, and Facebook being some of the most popular and effective for B2C marketing.

B2B, B2C, and Matter Made

Planning a B2C or B2B marketing strategy isn’t easy and shouldn’t be taken lightly. 

A well-defined strategy that has the right approach to branding, customer relationships, and audience targeting can take your company to new heights. 

Why not combine efforts with Matter Made? We have a team of expert marketing professionals who can help you build B2C or B2B marketing strategies that will see you rise above your competition. 

Interested? Let’s talk!

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