Measuring the success of marketing strategies involves a combination of quantitative and qualitative metrics. Metrics can demonstrate whether a marketing campaign has been successful or not. They provide concrete evidence of the effectiveness of your strategies.
Here are some ways to measure marketing campaign success:
Start With Historical Metrics
Starting with historical metrics involves using past data as a reference for measuring current marketing strategies. This includes analysing e-commerce analytics such as site traffic and conversion rates. By comparing these with current metrics, you can assess the effectiveness of your strategies. Historical metrics also help identify trends, like increased website traffic during certain periods, which can inform your future marketing plans.
Customer-Focused KPIs
Customer-focused KPIs are a category of Key Performance Indicators that emphasise the customer and their interactions with the business. These quantifiable measures are utilised to evaluate a company’s performance concerning customer-centric objectives. Such KPIs assist businesses in comprehending the extent to which they are fulfilling their customers’ needs and expectations.
Customer Satisfaction
The measure of how well a company’s products, services, and overall customer experience meet customer expectations. It reflects how well your products or services resonate with buyers.
Customer Retention Rate (CRR)
A key metric that indicates how well a company is able to keep its customers over a given period of time. It’s a measure of a company’s effectiveness in making customers want to stick around and continue to use its products or services.
Formula: (End of a period customers – New customers) ÷ Start of period customers x 100% = CRR
Conversion Rate
A key performance indicator that measures the effectiveness of marketing efforts. In the context of online advertising, it’s the percentage of users who take a desired action after clicking on an ad. The desired action could be making a purchase, signing up for a newsletter, downloading an app, or any other goal of the marketing campaign.
Revenue Attribution KPIs
Consider how much of the revenue is a direct result of marketing efforts. This can provide clear, high-level insight into how successful the marketing efforts are for the company. In aid of identifying effectiveness of marketing strategies, the following equations can be used after implementation of marketing campaigns.
Return on Investment (ROI):
This is a common metric used to evaluate the efficiency of an investment. For marketing campaigns, the mathematical formula below can be used to identify ROI.
Formula: (Sales growth – Marketing cost) ÷ Marketing cost x 100 = ROI
Growth in Revenue
Growth in revenue refers to the increase in a company’s sales over a specific period of time. In accounting, it is calculated as the rate of increase in total revenues divided by total revenues from the same period in the previous year.
Measure and Optimise Your Marketing Performance
These models help in accurately forecasting the indicators, allowing decisions to be reoriented to ensure performance optimization while reducing both cost and effort. However, the specific mathematical model used can vary greatly depending on the industry and the specific goals of the company.
It’s also important to note that achieving marketing campaign efficiency requires a balance. Businesses must ensure they are delivering high-quality products and services that meet customers’ needs while also managing their marketing costs effectively.