Return on Investment

Before you spend on anything, it is reasonable to want to know what value you will receive. Your marketing can only be deemed successful if you receive more value than you spend.

Does that mean your marketing can only be successful when you have generated enough attributable revenue from your inbound marketing to break even on your marketing spend? Not necessarily. Think about it this way: how does a company calculate the return on investment of a renovation to its headquarters? Maybe they can directly correlate an increase in output or productivity because of certain advancements to their building. But there are usually more factors to consider as well, all of which affect the bottom line in some capacity. Maybe their modernized headquarters gave a prospect enough confidence to seal the deal. Maybe the renovations have helped the company attract and retain talent that has increased productivity and revenue. Maybe the renovations reduced energy costs, which increased margins. When calculating the ROI for this renovation, all of these factors need to be considered, but some are less tangible and harder to track than others.

Calculating the ROI for marketing, especially in the modern information economy, is very similar. It’s getting harder to draw a clear line from impression to click to conversion to easily validate the effectiveness of a marketing campaign. Marketing intelligence is more about tracking “signals” that indicate audience behavior rather than following direct attribution. This is because most consumer journeys involve many marketing interactions with the company. The buyer’s opinion is slowly formed over time, and all touchpoints work together to help them inform their decision.

On top of that, any given marketing campaign often has secondary and even tertiary benefits that can be hard to quantify. For example, a piece of marketing content could have increased traffic to the website and led to two leads, but it also could have contained the information a prospect needed to be pushed over the line and make a decision. Or a dormant customer who receives a LinkedIn ad for a company might be reminded to send an email to her salesperson without ever clicking on the ad. Even with the most robust analytical process in place, the full value of each marketing activity will likely always be unknowable.

So then what is the smartest way to approach the messy business of marketing ROI calculations? Let’s break it down based on marketing goal:

ROI of Identity maintenance

Activities such as website redesigns, brand refreshes, brand messaging updates, brand collateral or website updates, culture videos, etc.

If you spend a significant portion of your budget on identity maintenance (think a website redesign, brand refresh, etc.), you want to know if it paid off.

The simplest way to track return from identity maintenance is to look at your bottom line. For example, if a year after updating your brand messaging across all of your marketing content, your revenue is up 10%, it is reasonable to infer that the update played a role in that increase, assuming there weren’t other major changes elsewhere in the business. It can be hard to have a granular breakdown for identity maintenance activities; these projects are often implemented across the whole company and not attributable to one specific channel. A large change like updating your brand messaging affects every level of your marketing funnel—from the homepage hero new prospects see the first time they visit your website to the language in a pitch deck that helps you close a deal. In addition to improvements to your bottom line, here are a few signals to watch for:

Website lead generation:

For website redesigns specifically, an increase in qualified leads originating from organic website traffic is a sign that your improvements are working. If you generated 2 leads from your website the year before your new site was launched and 12 leads the year after, intuition says that the new site is attracting more of the right type of people. Paying close attention to attribution data and doing further analysis to test if the increase is statistically significant can increase your certainty about whether or not your new website is working. If you are attracting more qualified leads but few are closing, that’s a sign you might need to focus your attention elsewhere in the sales process. If you have seen an increase in traffic and conversions but not from qualified leads, it is worth tightening up the content of your website to better fit your target audience.

An increase in your win rate:

Identity maintenance can also affect your conversion rate and ultimately your win rate. If you take time to add calls to action, improve your landing pages, and update your sales material, you should see your close rate increase. Doing this will make all of your other marketing activities—brand awareness, lead generation, and audience engagement—more profitable. Don’t excel at the top and middle of the marketing funnel, then fumble on the one yard line. Make sure your marketing is helping you convert and close deals, then track your success.

Faster “aha” moments:

Any salesperson can recognize the moment the value of their company's offering “clicks” in the mind of a prospect. It is the turning point in which a potential buyer goes from trying to understand the product or service being sold to being able to conceptualize and desire its impact on their business or life. This “aha moment” doesn’t guarantee a sale, but it's a sign that the sales and marketing communications have been effective; the prospect understands the offer and is able to fully weigh their decision.

A clearer brand identity means that your offering will click with your audience faster than before. This signal isn’t necessarily one that you can observe with an analytics tool. Have your sales team pay close attention to prospects during sales calls to notice when the “aha” moment happens. If your brand identity is clear enough, it may even happen before the first call. Also make note of the verbal or written feedback you get from prospects or customers. It should be clear when your brand and offering are more understandable and memorable. If this is happening across the board, it’s a sign that your work is paying off.

Learn more about this topic:

• Identity maintenance marketing techniques
• Identity maintenance strategies by industry:

ROI of brand awarness

Think about brand awareness in terms of a new coffee shop that opens on a busy street. People pass by every day and see their signage. They run ads in the local paper and on Facebook. Their community knows about them, and when they open their doors, people fill their space. Some of those people only stop in, check it out and leave. Some visit only to use the WiFi and never order. Others buy a cheap coffee and never come back. Finally, others still become daily customers. For this coffee shop, brand awareness is only about getting more people in the door; it isn't responsible for selling more coffee.

You can’t measure the success of brand awareness campaigns purely against the bottom line. A brand awareness campaign might be very successful and grow a company’s reach, but if its website isn’t built to convert and its sales process isn’t adequate, it won't generate any revenue. Think about the coffee shop: it might be successful at getting people in the door, but if no one is staffing the counter, they won’t make any money.

So then what signals can you watch for to see if brand awareness is working for your business:

Improvements to your "vanity” metrics:

Since brand awareness is about getting people in the door, not winning new business, this is one area where the classic “vanity” metrics of digital marketing can actually be helpful. Watching for an increase in views, impressions, or similar metrics can show you if you are successfully telling more people that you exist.

It’s important to bear in mind, however, that not all views are worth getting excited about. Ad platforms have no problem taking your money in exchange for views, so it's on you (or your agency) to do your due diligence to make sure that the audience is correct by adjusting the targeting and filtering out bad placements. If you can tell that you are seeing an increase in views and impressions from an audience that largely fits your target market, then you can consider your brand awareness campaign a success.

A growth in website traffic:

An increase in website traffic can also indicate brand awareness success. Even if the traffic is logged as organic or unattributable instead of directly tied to a campaign, a genuine spike in traffic means that more people know you exist and are seeking you out.

An increase in foot traffic:

If your business has a physical location from which products or services are sold, then an increase in foot traffic can be an equal indicator of brand awareness success. If you run brand awareness advertisements in conjunction with a trade show, you should watch for an increase in visits to your booth. Just like the coffee shop, if more people are in the door, that means more opportunities to sell. If you find that more people are visiting but fewer are buying, that may mean you should tighten up your targeting, or it may mean you should make improvements to your sales process, pricing, or in-store experience. Depending on what type of brand awareness campaigns you run, you may be able to do footfall attribution, or this signal may be purely based on conjecture.

Survey responses:

One of the most reliable ways to figure out if your brand awareness activities are working is to simply ask new customers how they heard about you. Their answers should give you a good idea of what activities seem to be working, and what aren’t. This signal does rely on people to self-report their data, so it can be harder to measure at scale, but the insights you do learn can be very helpful.

Remember, resist the temptation to correlate brand awareness too strongly with your bottom line. If your entire sales and marketing process is running as it should, then well-executed brand awareness activities should make you money. However, if your primary complaint is a lack of leads or a poor close rate, focus first on other parts of your sales funnel.

Learn more about this topic:

• Brand awareness marketing techniques
• Brand awareness strategies by industry: