How do you determine whether a business is on track to meet its goals, identify areas of improvement, or measure how well its investments are yielding returns? Small business owners likely rely on a series of business metrics like sales revenue, net profit margin and more. This data gives them visibility into company performance and ensures they're able to consistently drive success.
But what about when it comes to marketing efforts?
If you don't measure marketing performance using the appropriate analytics, you could be losing money and missing critical opportunities. Most marketers who adopt data-driven campaigns enjoy five times the ROI on marketing spend, according to Business2Community.
Here are three reasons you should begin to measure marketing performance, if you're not already:
Optimize Your Spend
While marketing spend likely consumes a significant portion of an organization's annual budget, many business owners may not track the appropriate analytics. Without these insights, it's impossible to determine which marketing efforts are working, and which are draining your resources.
For example, if you're not tracking which social platforms are driving the most qualified leads, you might assume they're all equal. However, marketing analytics may show your business earns the majority of its best leads through just one or two platforms. Having this data on hand will improve your marketing decision-making and allow you to adjust your spend in the right places.
Know What's Broken
Not every marketing strategy is a smashing success on first attempt — some efforts drive mind-blowing results while others fall flat. But if you're not monitoring your performance, you'll only discover something's wrong after it's already failed. Wouldn't it be better to identify what's broken before it's too late to be fixed?
For instance, imagine you're running an ad campaign, but forget to select the proper audience. If you're monitoring your digital campaign closely, you'd be able to uncover this error and quickly rectify the issue to ensure the ads reach their intended target. If you're not watching your analytics, you risk wasting time and budget on broken efforts.
Identify and Replicate Success
It takes some trial and error to discover which mix of channels and platforms yield the best results for your business. But if you measure marketing performance, you can make better informed decisions and identify your marketing "sweet spot" sooner.
Monitoring the right analytics for marketing can help you pick up on patterns within your cross-channel strategy so you can recreate that same success. For example, a retailer may discover most online sales happen between 6 p.m. and 10 p.m., and typically after a contact opens an email or engages with an ad on a social platform. Thanks to this data, the retailer knows when to launch their email offers and trigger social ad campaigns to maximize sales.
The truth is, becoming more data-driven in your marketing efforts is easier said than done. But we're here to help. Stay tuned for the second part of this series where we break down a few of the most critical analytics terms.