You’ve pushed through your marketing roadblocks, surveyed the landscape, you’ve set your goals, and planned for success. Now it’s time to hit the road and #GetGoing on the plan you’ve worked hard to create. But before you put your marketing engine in drive, it is wise to determine the mile-markers you’ll follow to keep you from veering off course.
Much like setting a GPS before a long road trip, establishing metrics to measure your marketing progress will help you to avoid distractions, clear roadblocks, slow down before speed traps and arrive at your destination on time and as planned.
We’ve outlined three important metrics that will help your marketing GPS stay on course.
1. Set Your Key Performance Indicators
Key performance indicators (KPI) are a set of quantifiable measures that a company uses to gauge its performance over time. These metrics are used to determine a company’s progress in achieving its strategic and operational goals, and also to compare a company’s finances and performance against other businesses within its industry.
Different departments within your organization will have varying KPI’s because what sales values is different than what finance values. But each department should have a set of KPI’s written down to help them track measurable progress towards goals.
We love what Dennis Mortensen says about KPI’s:
A KPI: 1) Echoes organization goals, 2) is decided by management, 3) provides context, 4) creates meaning on all levels of the all organizational levels, 5) is based on legitimate data, 6) is easy to understand and 7) leads to action!
- Sales Revenue: Amount of revenue generated by your marketing efforts
- Sales team performance: How effectively is the sales team conveying the marketing information you have trained them on?
- Marketing Event attendance: How many people are attending your events?
- Cost Per Lead: How much it costs to acquire customers
- Unique Website visits: The number of new website visitors who land on your site each month.
- Requests For Proposal (RFPs) by qualified prospects: The number of customers who are moving from discovery to requesting a proposal.
- Customer Value (Also known as the Lifetime Value of a Customer – LTV): Measures the average amount of revenue a single customer generates over the course of their “lifetime” of doing business with you. Helpful for measuring ROI.
- Inbound Marketing ROI: The amount of return you are seeing on your inbound marketing efforts.
- Traffic-to-lead ratio: Shows you what percentage of website visitors become leads. A small improvement in this ratio could generate significant increases in lead generation..
- Lead-to-customer ratio: How many of your new leads are converting into customers?
- Landing page conversion rates: Are people who find your landing page taking the next step?
- Form conversion rates: Is anyone filling out your online forms?
- Organic traffic: People who arrive on your site from searching one of the search engines.
- Social media traffic: People who are referred to your site from social media.
- Mobile Traffic, Leads, and Conversion Rates: What is the usability of your mobile site? If your mobile site has a low conversion rate, it means customers are struggling to locate items of importance to them.
2. Determine Your Budget
We often are asked
“What percentage my spend should be spent on marketing?”
Your spend will vary by the following factors: (1) the industry you are in; (2) the stage of business growth you are in, (3) the competitors in your space, and (4) the size of your business.
Companies that have a memorable product or a service that meets a niche need won’t have to spend as much as a product or service that creates a new category. Organizations that are well-established in the marketplace, have great brand awareness, and word of mouth will not have to spend as much as one new to the market.
Marketing budgets for companies that are newer and working on generating brand awareness can range from 12-20% of gross revenue while more established companies are more likely to set their marketing budget at 6-12% of gross revenue. Newer companies typically have to spend more because it takes more activity to grow early on vs. marketing an established and known brand.
Once you have your overall marketing budget number, then your next step is to break it down into component costs. Hubspot offers 8 marketing spreadsheets that can help.
3. Keep Your Strengths In Focus
Taking time to evaluate and double-check that you’re heading the right direction is never a waste of time. It may feel like it’s slowing you down, but in the long run working through these proven routines will keep your plan on course and deliver results. We always advise teams and customers to “Focus on your strengths and navigate your weaknesses.” A lot of small businesses spend an inordinate amount of time trying to fix or mask their weaknesses and lose valuable time that they could be spending accentuating their strengths.
A strengths-focused organization always will pull ahead of those who are trying to manage their weaknesses.
Answer the following questions:
- What makes your product or service stronger than its closest neighbor?
- What makes you memorable and unique in the marketplace?
- Who are your closest competitors and what do they have that you don’t have?
- What messages are resonating with your audience and why?
- Do you know the pain points that your messages are connecting with?
- How does your product or service solve the potential customers problem?