Especially for small business owners, marketing can be both complicated and expensive. You may know that you need to run regular campaigns in order to attract new customers and grow your business, but does that knowledge matter if you can't afford it?
Of course, the same question becomes much more focused if you understand just how beneficial your marketing efforts actually are in accomplishing your business goals. Unfortunately, simply focusing on how many people your recent Facebook post or campaign reached does not actually give you any information about the success of your efforts.
Determining return on investment, predictably, is among the biggest marketing challenges small businesses face today. How can you commit to an expensive and time-consuming marketing campaign if you don't know whether it actually helped you do more than just 'get your name out there'?
The first step to rectifying that problem is simple: you need to understand how to actually measure your success in marketing your small business. Fortunately, you can do just that in just three steps:
1) Setting Your Goals Before Your Campaigns
Before even thinking about a potential marketing campaign, always make sure you know what your overarching goal is. Why are you about to spend the money? Are you simply looking for brand awareness in the local area, or do you want to increase website clicks and increase your lead generation?
Goals, at this stage, don't have to be specific. They should, however, be measurable. In other words, you should be able to determine the success of your marketing campaign by the goal you set prior to its start.
If your goal was to increase e-commerce purchases from your website, only an increased number in purchases during and after your campaign can tell you whether the campaign actually worked. How do you get there? By focusing on the right metrics.
2) Focusing on the Right Metrics for Success
Marketers have long distinguished between so-called vanity metrics and numbers that actually matter in measuring your marketing success. Vanity metrics sound good; they allow you to easily make it look like your money was actually worth spending. They don't, however, provide you with the insights you need to determine actual success connected to your goal.
Traditionally, vanity metrics focused the number of ad impressions and users your campaign reached. A reach of 60,000 Facebook users sounds great. But if none of those 60,000 individuals actually become customers, they don't really help to grow your business. In reality, we'd suggest, vanity metrics depend specifically on the marketing goals you've set in the first step.
In essence, any number that does not relate to your overarching campaign goal should be considered a vanity metric. If your goal is simply to raise awareness, reach actually does matter. But if you're looking to increase your e-commerce purchases, even click rates don't get you to your evaluation. In that case, conversion rates become significantly more important.
Phrased differently, the metrics you should always focus on are the ones that can help you determine your actual return on investment. And ultimately, that ROI comes down to the number of customers you generate on a given budget. Once you know that number, you can build a marketing campaign designed to succeed.
3) Building a Marketing Campaign Designed to Succeed
At the end of the day, the goal of any marketing campaign should be to generate positive ROI. In other words, the value you get out of running your campaign should outpace the possibility of simply keeping your resources and not running any marketing.
But for most small businesses, that's a difficult proposition. If you don't know how to track your ROI, you can't reliably build a marketing campaign that accomplishes that. That's why setting your goals, and focusing on metrics designed to accomplish these goals, is absolutely crucial in building a marketing strategy that's actually beneficial.
If your marketing campaign is built around goals and metrics specifically designed to generate positive ROI, they become a lot less scary. Suddenly, you can invest even limited resources feeling confident that your small business will benefit and not suffer as a result. Your business will grow, and you'll recognize marketing as an essential part of your success.
To learn more about how to improve your marketing strategies, give us a call or send us a note today at Small Dog Creative 661-702-1310!