The biggest reason companies fail to generate an ROI from their internet marketing activity is because they don't have a plan.
Most people fall into the trap of saying that they can't predict their internet marketing ROI because internet marketing is so new. And if we humor them for a second, it's true. The first blog software was created less than a decade ago. Google and the "SEO" acronym have been around only a little longer than that. The largest online social network on the planet is less than five years old! This stuff is so new and evolving so quickly, how could we ever predict, then measure the impact?
The answer is pretty simple. Analytics enables companies to measure this stuff. Data culled from different sources enables prediction. In fact, I'd rank "predictability" and "measurability" as one of the biggest reasons new media is killing old media.
So, What Metrics Should You Use to Gauge Internet Marketing Success?
At HubSpot, we believe that the biggest reason to do internet marketing is to generate leads and new business. In other words, use the revenue you generate from internet marketing to justify internet marketing expenditures.
Seems simple. But, so many marketers get lost in all these other made-up metrics. I'll let you in on a little secret: most CEOs and CFOs could care less about any other metric other than revenue.
At HubSpot, lead generation and customer acquisition stats are what we use to evaluate whether we repeat any marketing activity, or not. If you want marketing to drive the growth of your business, I recommend you follow suit.
So, here are three Steps to using your revenue goals to guide your online marketing activities:
1. Audit Your Current Website and Online Marketing ROI.
First, use marketing analytics tools to measure the a) visits, b) leads and c) sales generated through each online marketing channel. This applies to you whether you're a B2B or B2C company, and whether you sell online or in the real world. We suggest measuring the following channels: SEO, PPC, Blogging, Social Media, Email, Affiliate, Other (free), Other (paid).
If you're not using closed loop marketing yet, any analytics tool should help you figure out how much traffic you get from each source. If you know your monthly revenue, you can then guesstimate your visitor-to-lead and lead-to-customer conversion rates.
To get started with this process, Download this Free Spreadsheet.
2. Set Revenue Goals
I recently spoke to a marketing team at a company that was generating $10k/month of revenue through their online marketing. They also execute traditional marketing campaigns, but the owner has tasked them with generating more revenue through the website, as it obviously has a lower cost structure once fixed costs are covered. Their goal was to triple their online revenue.
Before you do any internet marketing, you should set your goal. Tripling your revenue from online channels might be aggressive for your business, but having a goal allows you to determine what activities must be completed in order to achieve that goal. You can always make your estimates more conservative.
So, I say, "Be aggressive. B. E. Agressive." Dream big! What happens if you triple the ROI from your online marketing? Do you get a raise? A promotion? Can you hire a new person? Can you buy a second house? Send your kids to college? Go on a second vacation?
3. Determine Your Action Steps
I'd recommend that you speak with an internet marketing expert at this point. An expert will leverage data to help you determine your internet marketing strategy. You could also read a lot of internet marketing ROI benchmarking data, study other company's internet marketing results and internet marketing case studies. You should also consider enrolling in an internet marketing workshop.
An internet marketing expert will set up a strong marketing analytics package to audit your current situation. They'll also look at keyword and competitive data in order to figure out how much time and money would need to be invested in PPC and SEO in order to hit your goals. Traffic from SEO and PPC can be predicted with reasonable accuracy. Blogging and social media results can be predicted from there.
Additionally, they'll look at your site to see if you're following lead generation best practices and they can talk to you about how lead tracking can help you convert more leads into customers using email, blogging and social media as nurturing tools.
All that said, no matter what the data says, you'll want to be sure to follow a proven internet marketing process. It's critical to execute your inbound marketing plan in a specific order. For example, SEO comes before blogging comes before social media, but they are extremely related and each one impacts all the others. And there's no sense in attracting or buying traffic, if you haven't figured out how to convert it into leads and sales.
How to Generate Leads for Small Business
Photo via mstorz.