When it comes to making an investment, we can become quite hesitant. If we can’t justify the importance of spending a certain amount of money, we tend to run for the hills! For business owners, this may come in the way of setting aside a proper budget for marketing. Businesses of every caliber will benefit from investing in marketing services, but how does one go about softening the blow of breaking open their piggy bank? Three words, Return On Investment (ROI). Seeing how much money is can be made off of an investment will ease the fear of making the investment in the first place. Returns on investments will look different for each person, but the ways to measure it is more similar than people think. It is important to see the effectiveness of a marketing campaign through the numbers, because it makes allocating funds into generating more potential customers worth while. Let’s discuss a bit more about measuring the ROI from your digital marketing channels.
Digital Marketing Channels Explained
The channels included in digital marketing are search, social media, paid, video, and email. It is important to note that each channel should be treated slightly differently, as audiences reached through specific channels may be at different stages of their “buying decisions.” For example, audiences found through paid channels tend to be closer to the final stage of their buying decision due to this particular channel focusing more on conversions. While these channels may operate differently, there is a strong synergy that they must have within the overall digital marketing campaign.
Measuring ROI Across These Channels
It is best to have a centralized dashboard that connects the analytics from all of the different channels. Google analytics does a great job of capturing data from the different channels, and allows users to create dashboards that show results from each of the channels. One of the most crucial aspects needed to consistently measure ROI across the channels is the implementation of event tracking. Events such as click to calls, contact form submissions, or even link clicks must be set up correctly, or else the numbers will be skewed. Once the proper events are tracking, which will show how many potential leads came through the channels, then it will be easier to calculate how much each lead is worth to the business. ROI is always a relevant indicator of success in digital marketing, because being able to show the number of conversions through a campaign is priceless. Each budget is different, and people are typically hesitant on spending money on digital marketing because it can be difficult to understand at times. Telling a client that they were able to make triple their monthly budget in less than a week is rewarding as a digital marketing consultant. ROI also allows more money to be put into other channels, which is a great way to increase conversions from struggling areas of the campaign.
How Should Small Business Owners Think About Digital Marketing in Terms of Finances?
Small business owners should think about digital marketing as an expense that is meant to drive sales and revenue. One of the biggest restraints that SMB owners who refuse to invest in digital marketing run into is their lack of time. It is not always efficient for a SMB owner to run their business, and properly monitor their digital marketing efforts at the same time. I have seen situations with clients who have spent thousands of dollars on a campaign that they ran independently, and were not able to make their money back from it. From their failed campaigns, they tend to become reluctant to run a similar campaign with a skilled practitioner. These bad experiences can be avoided with the proper guidance from the start.
What Should Small Business Owners Understand Before Hiring a Digital Marketing Agency?
Two very important things that SMB should understand before outsourcing to an agency is that they must have patience and their input is still very much necessary to build a successful campaign. Yes, there are some aspects to a digital marketing campaign that work faster than others, but the search engine optimization area of a campaign requires a lot of time and attention. This becomes especially true for businesses that are just starting out. SMB owners who expect their agency to handle everything can sometimes forget that an agency knows as much as they tell them. It is important for owners to share as much information on an ongoing basis with their agency for the campaign to run at its highest potential. There have been several occasions where business owners forget to share news and other information, that gets left out of their content outreach. Client calls ensure that there is a good line of communication, but it is important for the SMB owner to share any/every possible thing that can help us help them.
Other Metrics To Keep In Mind
Three very important metrics that SMB owners should apply to their digital marketing campaigns are click-through Rates (CTR), customer lifetime value, and conversion rates. A click-through rate has the ability to show which aspects of the campaign are bringing the most success. Low click-through rates should be assessed sooner rather than later, to help avoid the loss of too much money. Next, the value that a customer brings over many years can be overlooked. For instance, most digital marketing metrics focus on new users/clients, but it can be very difficult to see clients who are returning without going through the other channels. Needless to say, they are part of a bigger metric that improves ROI for the long term. Conversion rates is the bread and butter of all digital marketing campaigns. It is like setting up an “alley-oop” for a client. The campaign is designed to get their customers to convert, but they are responsible for carrying that interaction to the finish line.
If you are looking for help with your digital marketing campaign, contact us today to discuss how we can be of service!