There are two kinds of marketers in the world - those who get things done, and those who can
they got things done. When it comes right down to it, the difference between a “good” marketer and a “great” marketer is being able to make further decisions based on every action they've taken.
A good marketer will say “I spent $1,000 on paid search and generated 100 leads for the sales team. I’ll do more of this in the future!”. A great marketer will analyze the data one more level, and say “I spent $1,000 on paid search, generated 100 leads for the sales team, they closed 5 of them, and 4 of those customers left us after 3 months. I’ll think twice about trying paid search in the future.”
So how do you transform yourself into a better marketer? Making sure that you’re pushing the needle on the right metrics. Here’s a quick primer on 3 dead-simple marketing metrics that everyone should be focusing on in some capacity.
1. Return on Investment (ROI)
Return on Investment is a percentage that helps justify your spend on any action. If you are making more profit than what you spent on the investment, all is well - this action was worth your investment.
ROI = ( Profit - Investment ) / Investment
But before you run off to Excel, lets make sure you’re taking all the relevant factors into account. When you make this calculation, are you really looking at profit, or are you focusing on revenue? This one is a bit tricky, so don’t worry - just make sure you’re using what is left over after sale has closed.
Now lets give this a shot. You’ve just done a mailing campaign, and it cost you $500. It took you about an hour to put together, and you’d normally bill out at $100 for this (our Investment is now up to $600 total). It really doesn’t matter how many people the mailing went out to, but we’ve generated 50 leads from this effort, which our Sales team values at $20 per lead (this puts our Profit at $1000). So our ROI calculation looks like this:
ROI = ( $1000 - $600 ) / $600 = 0.66
Multiply by 100, and you’ve got a percentage, and for this effort, our return was 66.7%. On the surface, we made less than we spent. A good effort would be one where the result is greater than 1.0 - it means we made more than we spent. If your ROI is anything less than 100%, you're probably better off putting your investment into an interest-bearing account of some kind.