Small businesses depend on marketing just as much as large businesses, maybe even more – even when they’ve become a household name in their local area. How do you track marketing success? How do you get insight from marketing failures? This is a challenge for every business, but it can especially daunting for a small business that can’t afford to hire marketing specialists.
Here are some tips for getting small businesses marketing plans running smoothly, and providing you with real metrics that drive results.
Learn What to Calculate and Why
Before you can dig into figuring out how to grade your marketing performance, you have to know what to measure and why. At the end of the day, the only number that matters is cash – how much sweet, sweet revenue did you make? But marketing metrics can tell you a lot more about the health of your business, and sometimes the numbers aren’t as straightforward as you think. Dive into this alphabet soup and see what you should be monitoring.
LTV. Life time value – this is how much money you earn from an average customer over the course of their entire business cycle with you. Do you have repeat customers? Ongoing subscription plans? How long do these customers, on average, keeping coming back? Crunch the numbers and figure out how much you make from a customer over their lifetime.
CAC. Customer Acquisition Cost – or CAC – is one of the most important metrics to track. It is easy to calculate too, just add up all of your marketing expenses over a time period including salaries and overhead, and divide it by how many new customers you acquired. Compare your CAC to your LTV – the LTV should be at least 3x higher for successful marketing. For example, if you spend $100 to acquire a customer, but on average they spend $500 with you – that’s some great marketing.
NPS. Net promoter score – this is a measure of how willing your customers are to talk about and promote your business. This number can be negative – that’s really terrible. If your NPS is above 50% you are doing an amazing job. Most companies have an NPS score of around 25-30%. Here is some advice on calculating your NPS score.
Digital Engagement. This category covers different scores such as time on page (how long a customer stays on your page), to email open rates, to clicks on paid click ads. This is an easy way to measure if people are using your website, opening your email, or clicking your offers. If you are doing digital marketing (and you should!) the tools you use should provide ways to monitor digital engagement.
Attribution. Attribution measures how much a specific touch, ad, email or direct mail send moved the customer closer to buying. Attribution is incredibly hard to measure and everyone seems to have a different opinion on how it works. Despite that, it is important that you try to calculate it because even the attempt at figuring out your attribution will help you. Soon you’ll be thinking about your marketing efforts in different terms. Here is some info on measuring first and last touch marketing attribution.
Of course there are a lot more metrics you can target but these will get you started.
Start With Digital Marketing
Digital marketing includes a range of tactics, from posting to your blog to advertising on Facebook. Though each of these options are very different, they all make tracking real-time engagement easy.
There is a giant pile of tools, solutions, and apps out there that can help a small business track marketing efforts. For a small business just getting started with tracking their marketing, digital channels make it easy to dive in and start doing the math. Start with these tools:
- Mailchimp is the gold standard in free and low-cost email marketing platforms. They offer easy to use reporting tools for email campaigns and great technical support, how-to guides, and forums.
- Google Analytics is used by just about every company with a website to track every possible metric for a website. Large marketing teams will have specialists dedicated just to this program, but you can still learn how to use its basic features and they will be enough to give you insights into digital marketing.
- Hubspot has great, free resources for all things marketing related, check out their Excel templates for tracking marketing metrics.
- Built in tools for social platforms – Facebook, Twitter, Hootsuite and more offer ways to monitor your clicks, tweets,
Keep Records Updated
Keep your records accurate. Update all of your metrics at least once a month and if you can, use a tool to help you automate your marketing reports. Enterprise level marketing automation programs may be out of your reach, but with some clever spreadsheets and elbow grease, you can keep accurate data throughout the year.
Compare your results to your marketing plan, but don’t be afraid to change your idea of success. Maybe you’re falling behind on revenue goals, obviously that isn’t good. But what if you find social media efforts are paying off and you’re adding new followers? Should you stop putting money and effort into Twitter? It may make more sense to test ways to make Twitter a revenue generator.
Keeping accurate, timely records won’t just show you where you’re failing, but where you’re succeeding behind your own back.
Weight and Score Your Touches
In a typical campaign you may send a customer an email, a coupon in the mail, and then send them a Facebook ad if they’ve followed you. You should weight and score each of these send. How you do this is more art than science, and will change as you do more and more marketing. In this example, you could weight the email as being cheap, fast, and easy to duplicate.
If people are responding it it really well, clicking through and reading the site you direct them to, then you can score it highly. The direct mail coupon is going to be expensive compared to the email, but maybe not as expensive a Facebook ad. Measure these differences and give yourself a scoring system that works.
End with a Digital Strategy
There is a whole world of marketing outside of digital channels, and they’re often way more expensive than sending an email or paying for a Facebook ad. They’re also harder to track, but driving customers back online leverages the power of digital reporting. Big companies pay big bucks for special software to get this sort of functionality, but you can mimic these tools by making your calls to action point back online.
If you use a printed piece to advertise your business, make the call to action feature your URL. If you send coupons, make them redeemable online. Use unique coupon codes to tag and track where your customers are coming from.
There are plenty of online resources to help you learn more about marketing, reporting, and metrics. They’re complimented by tools that can help you build reports. They can give you clear, actionable insight into your marketing. They help you learn from success and failure.