This is part two in a series on marketing your business. Check out part one: How Do I Create a Marketing Strategy for my Small Business?
As a small business owner, every resource you invest in your business is precious. Marketing is essential to grow brand awareness, generate leads, and connect with current customers. But how do you know which initiatives are working and which aren’t worth your time?
Meaningful marketing results don’t happen overnight — it can sometimes take months to a year or more as awareness is building. Some types of marketing, like content marketing, may require a months-long investment in order to even begin to impact search engine results.
Regardless of how . long or how quickly it takes to get results, you need to have measurement and tracking in place to make sure those efforts are achieving the desired results. Here’s a primer on how to evaluate and evolve your marketing efforts.
1. Calculate Return on Investment
To protect your time and money, you need to be able to calculate the return on investment of your marketing campaigns. Here is a simple formula for calculating marketing ROI:
(Sales Growth – Marketing Cost) / Marketing Cost = ROI
You can apply this formula to all types of marketing campaigns. For example, say you ran Facebook, Instagram, and Twitter ad campaigns for your business. You can look at the analytics of each ad campaign, see how many sales each one brought, and then apply the formula to calculate the ROI of each channel’s ad campaign. You may then choose to pause a channel’s ads, or apply what worked for one channel to the others.
Keep in mind that you need to confirm that sales growth came from that specific marketing campaign. In other words, if you can’t attribute the increase in sales to what you’re doing in marketing, this won’t work. Additionally, if you’re running several campaigns at once without any tracking in place, then it will be much more difficult to calculate ROI. If you’ve already been experiencing steady sales growth before you ran a marketing initiative, that average sales growth needs to be separated from your formula.
Also, you may want to edit this formula depending on what you want to measure. If you’re looking at increasing leads, then you’ll want to assign a dollar amount to the lead and replace sales growth with what those leads are worth.
For whatever ROI you’re measuring, you’ll want to use a reliable analytics tool, like Google Analytics, to track your leads’ and customers’ journeys. Before any marketing initiative, you need to first determine which metrics you want to measure that bring brand value, how you will measure those, and how long you will wait before measuring them.
2. Gather Customer Feedback
Another way to learn which marketing campaigns have been most successful is to talk with your customers. In addition to using your analytics tool, customer surveys can help you see what’s working and what you need to improve upon. Especially when you use offline marketing campaigns, you need to make sure they’re resonating with customers.
Although watching what your customers do is much more accurate than asking them what they would do or how they perceive your marketing efforts, asking them can add color to the results you’re seeing as your measure how they interact with your marketing.
Customer feedback can be valuable because it gives you additional insight, and at the same time makes your customers feel valued, since you solicited their opinion.
Some ways to gather customer feedback on marketing initiatives include:
- Send out an automated email survey that is triggered when customers interact with certain marketing campaigns.There are a number of good email marketing tools to use for this.
- Talk with customers on social media. Ask questions regarding campaigns. When an individual messages you, use that as an opportunity to gather additional feedback.
- Create a customer survey contest. In exchange for participating in a survey, you might offer a cash or product reward. You can use a free survey tool like Google Forms or Survey Monkey to create the surveys.
Ask new customers how they heard about you. Regularly poll new and existing customers about what marketing campaigns they benefited from. This is also information you can capture at the time of sale.
Maybe it’s emailing offers. Or perhaps your customers are learning a lot from your new blog. Or, you might find that your target customers are really active on Instagram and Facebook but rarely use LinkedIn. Learning about your customers’ needs and wants will help you evolve your marketing campaigns.
3. Review Sales Growth
Because marketing results can be a cumulative effort across campaigns working in tandem, another way to evaluate your marketing plan is to see where your sales are today versus before you started any marketing efforts. If you’re selling significantly more today overall or in certain areas, that could be attributed to your marketing.
For example, say you ramped up local search engine optimization (SEO) efforts in the Southwest, and you see that sales there are increasingly significantly. You can apply those same SEO tactics to other parts of the country.
Or, maybe you notice that your average sales growth is on par with last year, even though you’ve invested in new marketing initiatives. You can then examine why those weren’t working, and optimize them or try something new.
4. Ask for Partner Insights
As a busy small business owner, you may have outsourced marketing tactics to a freelancer or agency. The professional(s) you are paying for help should be providing real-time reports of your efforts. You should also ask them to provide competitor analysis and give you examples of how customers are reacting to your marketing campaigns. If you’re not currently getting those insights, ask for them now.
If you have a sales team, their feedback is also extremely valuable because they’re on the front lines with your customers. Anyone who works in customer service may also hear feedback about marketing campaigns. Make sure to train your staff to record any marketing campaign feedback they get, and regularly discuss your campaigns with your staff and outsourced help.
Track, Measure, Refine, and Repeat
Marketing is an ongoing business initiative that can bring you meaningful results. To be successful, you must:
- Have a plan in place to track each marketing campaign.
- Regularly review results.
- Optimize campaigns through testing.
- Gather feedback from customers, internal stakeholders, and outsourced partners to apply to marketing campaigns.
You need to consistently evaluate and evolve your marketing campaigns to maintain growth momentum and spend your dollars wisely. With a plan in place for each campaign, you can make smarter marketing decisions for your business. Looking to fuel growth by investing in some of these initiatives? Learn more to see if an expansion loan is right for your business.