The 6 things that measure marketing results, and return on investment your leadership expects
The goal of any organization should be to create a strategy that will measure the annual return on investments while managing short-term objectives. Planning and establishing operational order is important because it helps guide the decision-making process. Here are some variables to keep in mind as planning occurs:
Customer acquisition cost (CAC)
CAC is an index that reveals the average cost to gain new consumers. This information is also used to determine how much of an investment your company is making to attract customers on a monthly, quarterly, semi-annual or annual basis. This is important because it affects the bottom line. The lower this cost to acquire customers, the higher your revenue.
Customer life cycle
The customer life cycle is a term used to describe the progression of steps a customer goes through when considering, purchasing, using, and maintaining loyalty to a product or service. You must be aware of the costs associated with influencing a customer to buy your product/service and maintain that relationship. It’s a big part of your customer life cycle.
Return on Investment time (ROI)
The costs your company incurs to land a client, which can include anything from packaging to marketing, commercials, and web sites are just one half of the investment part of ROI. The return is when a client purchases a product or service. How much they spend and what products they buy give a clear impression of the effectiveness of a company strategy.
Measuring ROI is one of the most effective ways of ensuring that a marketing campaign, or anything associated with marketing is working. It’s important for businesses to know how an internal or external marketing team will measure the success of any campaign before that campaign is launched. This is sometimes referred to as a measurable outcome. Without the ability to measure, how will you know if your money is being well spent?
Examine data and measure performance
Data measurements help companies compare expected results to actual results and influence adjustments to strategies when necessary. In order to answer questions about improving sales, marketing strategies, and customer acquisition these things need to be measured in some form or another.
For example, what are your sales for the year, and the last four quarters? What marketing strategies did you use and how much did they cost? What were your customer acquisition costs for the year and the last four quarters? While numbers aren’t the sole reason for a company to move in a certain direction, it helps those with experience to confirm a consistent path or head in a new direction.
Business plans and flexibility
All companies strive to have a proven and consistent strategy to earn revenue, but the most successful are those who do not rest on the accomplishments of the past. A business plan remains effective if data is examined consistently – especially if a company is successful.
You don’t take your hands off the wheel when you’re driving a car just because it’s going straight ahead. Constant corrections and vigilance are key. Checking data, coupled with reliable employees can identify trends that work well, but also reveal situations that inspire change that requires minimal correction if you catch them early.
An organization’s business plan should be established through extensive examination of data and input from employees and leaders. The plan must be interactive and have some flexibility built in; changing as needs or as the organization requires. Success lies in strong internal collaborations that help companies anticipate and navigate challenges and meet objectives.
Companies often have a good portion of what’s needed to make them successful in relation to staff, and tools. Using the experience of the staff is a highly effective way to learn what is most important in building a good business and practices. Using the knowledge and experience of staff members makes them feel valued and important to the success of the company.
Some leaders may say that if an employee feels valuable, it may influence them in asking for a raise. If this the case, it makes business and financial sense to reward their impact in helping improve the business. In the long-term, it’s a cost saving to the company to keep a valuable employee rather than spend time and money to hire another.
Training staff before they can begin to add value to your company takes time and affects your bottom line. High turnover is one of the single most important causes of product/service inconsistency and loss of revenue. Keep and reward good employees – it’s the hallmark of an exceptional and profitable company.
For more information on success strategies for your organization, contact the experts at Advertising Avenue. We’d love to help.