What makes a good marketing strategy? More to the point, how do you know if your marketing efforts are successful or not? Generally speaking, there are a few KPI’s (key performance indicators) that every business owner should look at. Below, we’ve listed the main ones to measure if you want to see how successful your marketing campaign is:
Return On Investment (ROI)
This is the most vital metric to measure, and it’s all to do with how much money your marketing strategy generates. Essentially, you look at how much revenue you make compared to how much money you invested in the campaign. Let’s say you spent $1,000 on a campaign that saw you generate $4,000 in sales. Your ROI will be $3,000 – which can also be seen as 300%. Of course, the larger your ROI, the more successful the campaign. If you’re making a loss here, then things need to drastically change!
Overall Sales Figures
As well as looking at your ROI, you should see how much your marketing efforts contribute to your overall sales figures. Using the example above, let’s imagine your total sales are $40,000 during that same time. Here, your marketing is responsible for 10% of the sales. If you generated $400,000 in sales, then your marketing efforts are only worth 1%. The first example shows a more successful marketing campaign as it contributes more to the overall sales figures.
Cost Per Lead & Cost Per Sale
Cost per lead looks at how much money you spend to generate each lead. This doesn’t take into account the sales, but it does give you an idea of how successful your strategies are at generating leads. If you create a lot of leads, but the cost per lead is really high, then this might indicate an issue. Ideally, you want the cost per lead to be as low as possible. Cost per sale is similar, but we’re looking at the cost per each sale, rather than just per lead. In essence, it shows you how expensive each sale is. This is excellent when comparing different marketing strategies as it shows you which ones have the lowest cost per sale.
A marketing campaign will have plenty of different conversion rates. For example, you need to see which marketing techniques are bringing in the most leads. A high conversion rate shows you which ones are converting better than others. Then, you have lead conversion; how good is your strategy at converting leads into sales. The higher your conversion rate percentage, the more successful the campaign. These are the best KPIs to look at and measure for marketing success. A successful strategy should yield an impressive ROI, contribute heavily to your overall sales figures, have a low cost per lead/sale, and produce impressive conversion rates. You must measure all of these things from month to month to track your marketing efforts. Make tweaks if you notice things aren’t doing very well, then measure again to see if your changes worked. A fruitful marketing campaign is the secret to a successful business!
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