How to Set Marketing Goals, Track Conversions and Quantify ROI
“Is my marketing strategy working?”
This seemingly simple question vexes marketers and often goes unanswered, despite endless debate and voluminous analytics reports.
Why is it so hard? In large part because defining what works requires grappling with three underlying questions: What does success look like? How can I accurately measure my efforts? and, How do I evaluate the costs/benefits?
Put another way: The only way to know if your marketing strategy is working is to explicitly define goals, clearly establish what needs to be tracked, and assign value to action.
While that may sound daunting, it doesn’t have to be. With diligence and the right structure, any business—no matter how small or how complex—can properly attribute conversions to digital channels and begin to quantify ROI.
The importance of this intelligence is hard to overstate. With an accurate system of measurement in place you can gauge the true impact of your marketing efforts and make strategic adjustments to maximize effectiveness.
So, how do you do it? What’s the best way to map out goals, select the right metrics, and assign value? Here’s a four-step process that will set you up for success:
1. Establish Marketing Objectives and KPIs
Start the process by taking a step back and looking at your objectives and tactics. What are you trying to achieve in the short term and the long term? Is the underlying goal of your marketing efforts to drive leads or sales? Which marketing channels do you have access to? Which channels can you tangibly influence?
Next, define your conversion funnel. What’s the path you expect consumers to take from awareness to purchase? Where does marketing’s responsibility end and sales’ responsibility begin? Do you expect your marketing to deliver a certain number of leads in a certain amount of time? If so, how is this expected to impact revenue?
Tackling these questions will allow you to define your broad goals, as well as the specific KPIs that matter most. As you go through the exercise, make sure you don’t lump everything into a single category of action. There will be a specific set of KPIs for marketing (leads generated, etc.) and another set for the wider business (revenue, etc.). By delineating which metrics matter to which people/groups, you’ll be able to more easily assign responsibility and track performance.
Also, keep in mind that there’s a difference between what can be measured and what should be measured. In other words, you don’t have to keep track of everything. Pick the metrics that’ll truly help you make better decisions. For example, bounce rate on a landing page may not matter as much as the average session duration for your business; if that’s the case, then keeping an eye on the duration of converting sessions is fine.
Ultimately, what you want from this first stage is a group of high-level goals, a detailed conversion funnel, and a manageable set of KPIs that are clearly the responsibility of specific people/groups to monitor.
2. Configure Analytics and Validate Actions
After you’ve got your goals, funnel, and KPIs, it’s time to dive into your analytics suite.
Before you do, though, take a step back and reexamine what your platform can do for you. Today’s software suites, such as Google Analytics, have become incredibly powerful. This sophistication extends to what they can measure, as well as to which insights they can provide. For example, Google’s Multi-Channel Funnels reports can help you see exactly how your marketing channels work together to create sales and conversions.
The nitty-gritty of setting up your analytics suite to properly measure performance against KPIs takes time. Analytics configurations are rarely perfect on the first try, and often require adjustments. Our advice: stick with it and don’t be afraid to experiment.
Another recommendation is to pay close attention to visitor flow and validate behavior. Make sure you have the capability to evaluate how users interact at various stages of the conversion process. Are visitors moving through your site experience in the way you envision in your conversion funnel? Do they take the actions you expect? Do certain traffic-acquisition channels consistently outperform others?
Also, ensure that your analytics suite properly illustrates goal completion. Do the goals that you’ve laid out—and the series of steps associated to reach these goals—have clear points of success and failure?
Getting all this right takes time, but it’s absolutely worth the effort and investment to build an actionable analytics configuration. With a properly configured and validated analytics implementation, you’ll be able to measure success both broadly (how you’re doing with your KPIs) and at a granular level (how audiences are behaving; which channels and tactics are delivering).
3. Associate Value with Goals
Having access to metrics that illustrate how various channels are delivering against goals is important, but it’s not the be-all and end-all of measuring success. To get the full picture of your marketing plan’s effectiveness, you need one more element: value.
To understand this, you first need to determine channel performance by utilizing analytics resources such as advanced segmentation and multi-channel funnels. Once you know the exact number of successes at each stage, you can assign value to these actions.
To be clear, value doesn’t have to map directly and instantly to revenue (though it can). For example, a newsletter sign-up may not translate immediately to revenue, but that doesn’t mean it doesn’t have value. Over time, that subscriber may become a consumer of your products/services.
The key is to assign a value to both the easy-to-quantify lower-funnel events (such as converting on a landing page) and the more difficult upper-funnel events (such as gaining a newsletter subscriber).
The result of this exercise should be visualized purchase funnels for important audiences, with values assigned to each step. These should be as detailed as possible, but only to the point that can be justified by your data. In other words, err on the side of accuracy over granularity. What you ultimately want is a road map that shows how you’re doing step-by-step, the areas in which you’re succeeding/hitting roadblocks, and the costs/benefits.
4. Examine Performance by Audience, Value, and Action
Now that you’ve got your road map, it’s time to use it.
Dive in and look at how individual channels are performing; examine what you’re spending at each stage and how that’s impacting the other parts of your funnel(s). As you do this, make sure to think about who you’re measuring, not just what. In other words, gauge how different audiences are behaving within the funnel and what this means for your business. If high-value targets, such as returning customers, are following a certain path, then that series of actions may be worth exploring more deeply.
Also, try to evaluate your offerings together, as well as individually. Actions often work in tandem to create results. For example, a site visitor may visit a sequence of pages to understand your offerings, then purchase. Looking at individual elements in isolation isn’t enough—you need to look at audiences, values, and actions together to get the full story.
Often, when marketers say they can’t map their efforts to conversions and ROI it’s because they have the wrong mindset. There isn’t a magic formula where you can input all your channels and get a single number back. Rather, think of it as a Sherlock Holmes mystery. You must methodically gather evidence, and then follow the clues one by one (with your analytics suite as your Watson).
Think of conversion in terms of “if” and “then.” When properly configured, your analytics can show you that if a particular action occurs at X rate, then Y number of conversions are likely to take place. By approaching the challenge in this way, you’ll be able to build a dynamic model that’ll show you where your budget is being spent most effectively, where it is not, and how to adjust.
Ultimately, it’s possible to determine whether your marketing plan is working if you follow the steps outlined in this post. Have a system of measurement in place for your marketing campaign, based on clear goals and KPIs; map your analytics setup to these goals and validate your assumptions; assign value to each action in your purchase funnel(s); and evaluate effectiveness based on the full picture of audiences and actions.
One final piece of advice as you go through the process: don’t think of any of this as static. Your goals and KPIs can shift, your analytics setup should be continually refined, and your funnels should be constantly evaluated. In other words, don’t simply ask yourself, “Is my marketing plan working?” Instead, ask, “Is my marketing plan working right now?”
Learn new strategies for defining and measuring marketing success. Contact MDG today at 561-338-7797 or visit www.mdgsolutions.com.
MDG, a full-service advertising agency with offices in Boca Raton and New York, NY, is one of Florida’s top branding firms. MDG’s capabilities include print advertising, direct mail marketing, branding, logo design, creative, media buying and planning, radio and TV advertising, outdoor, newspaper, digital marketing, website design and development, online video advertising, infographic development, email marketing, video marketing, mobile marketing, content marketing, social media marketing, paid search marketing, and SEO. To learn about the latest trends in advertising and branding, contact MDG today at 561-338-7797 or visit www.mdgsolutions.com.