As Laura McLellan at Gartner predicts, CMO’s budget for technology is supposed to exceed that of CIO in 2017. What does this mean for you?
With increasing budget for technology, there will be more pressure for good marketing data. So how do you make the most out of this challenge?
The answer is simple: by measuring your data and optimising your processes.
Why should you care?
Research shows that staggering 66% of marketers don’t measure their marketing activities and/or performance. So why should you? Well, ask yourself this question: How can you improve something if you don’t measure it?
Imagine that you’re in a meeting with your CEO and they tell you that they need more sales this year. They give you a certain budget and tell you to come back with the best result possible.
How are you going to come back with really good sales figures if you don’t know what’s most likely to make it happen?
Here are you options:
- Do what you’ve always done and wonder if something else would work better
- Keep doing things at random and hope it works
- Start measuring your activity and repeat what actually works
If you’re like most marketers, you’re measuring some things, but are not really sure whether they’re the right things to measure. How do you find out, and which tools should you use to measure your marketing activity?
What should you measure?
It’s always good to start with something simple. Start at the bottom of your funnel: track the amount of sales you achieve every month. Measuring this single figure regularly and reflecting on the result keeps you well informed of your performance.
If you want to have a better idea of your situation, the next thing to measure if the number of proposals you send each month. If you know how many sales and proposals you’ve processed each month, from these you can derive your sales conversion rate.
For example, if you sent 5 proposals and made 1 sale, that means your conversion rate is ⅕ or 20%.
Moving up the funnel, the next thing to track is the quantity of leads you’ve generated. If you know this number, you will be able to calculate your lead conversion rate. For example, let’s say you generated 50 leads, sent 5 proposals and made 1 sale. Calculating the ratios of these values will give you a great evaluation of your performance. You now know that you sent a proposal to 10% of your leads and you successfully closed 2% of your leads.
This may not seem very useful. You may be asking now: What difference does it make if I know how many percent of my leads became customers? Knowing or not knowing the reality doesn’t change anything, does it?
The answer to that question is: It does when you know what activities are bringing these results. So to complete the picture, you should measure all the marketing activity you’re engaging in. This includes e-mail campaigns, social media activities, postal campaigns, advertising & PPC, telephone calls, and so on.
Engaging in all of these activities and measuring your results should give you a picture of how well each activity is working for you. That way, you can track the link between each activity and sale and precisely measure your marketing ROI. Ultimately, you’ll be able to determine which activities are leading to most sales.
Each month, produce a report of these activities, and evaluate how well you’re doing compared to the past. Too much work? Not if you have the right tools to do this for you.
Which tools should you use to do this?
One of the most powerful tools to gather and analyse all this data is a good CRM system. In fact, a well-designed CRM system will help you track all your business activities and your customer’s journey down the funnel.
That way you can see which of your activities brought the most customers into your funnel, and which types of your marketing activities lead to most successful sales. For more information about how Redspire and Microsoft Dynamics CRM can help you measure your marketing performance, get in touch.