Creating and releasing your digital marketing efforts is crucial for the growth of your business. But how do you know whether they’re successful or not? If you’re not analysing your current campaigns then you’re going in blind on your next ones and can’t be sure whether what you’re currently doing is actually right or not.
One of the best metrics you can look at to see whether your campaigns are working or not is measuring your digital marketing ROI (Return on Investment). Measuring this is the best way to work out if you’re spending your budget effectively and getting the most out of what you’re spending.
This post will dive into what digital marketing ROI is and how you can measure it for your own business. It’ll also be packed full of handy tips and guidance that you can use to help improve it.
- What is Digital Marketing ROI?
- How to Measure Digital Marketing ROI
- How to Improve Your Digital Marketing ROI
Digital marketing ROI is a measure of the profit or loss that you return on your marketing campaigns, based on the amount of money that you have invested overall.
In simple terms, this measurement informs you whether or not that you’re getting your money's worth from your campaigns. A positive ROI indicates that you’re bringing in more money than you’re spending. Whereas, a negative one shows that you’re making a loss on your efforts.
Without measuring your digital marketing ROI you’re taking a stab in the dark and marketing blind. This isn’t an effective way of operating as you don’t know whether or not what you’re doing is working. Even if it is - it might not be working to maximum potential.
And more importantly, if you don’t analyse the ROI on your B2B digital marketing campaigns you won’t know whether or not you’re spending your budget wisely or not. And no business wants to willingly be wasting money, do they?
If you want to take your digital marketing campaigns from strength to strength, then it’s vitally important that you measure this metric. Once you’ve identified areas that might not be performing as well, you can then look to target them more specifically. Rather than continuing to give areas focus that might not necessarily need it.
Knowing which parts of your campaign need more attention will help identify which areas require more of your budget to be allocated towards them.
Unfortunately, working out your digital marketing ROI isn’t just as easy as looking at how much money your different campaigns have returned compared to how much they cost you - we wish it was.
It’s especially harder to measure digital marketing ROI in B2B campaigns. That’s because there are so many different areas to the sales process that need to be addressed.
Plus, not all campaigns have an end goal of conversion. Some B2B campaigns are made to convert visitors into customers. Whereas, others are launched just with the task of raising awareness around a topic.
Your digital marketing ROI will depend upon what your unique goals are for your campaigns. There is so much data available for you to use on analytics tools that you can utilise in your favour. Here are some of the most useful metrics that can be used to help measure ROI:
If the overall goal of your campaign is to convert leads, then you need to look at the conversion rate. It’s one of the most common metrics that businesses use when assessing how well their overall campaigns are performing - and whether they’re on track to reach their end goal or not.
This metric is perfect for letting you know what you are doing well and which areas you could afford to pay a bit more attention to.
When it comes to conversion rate, you need to split it into two separate metrics:
Conversion Rate By Channel and Conversion Rate By The Device.
It’s alright knowing the overall conversion rate of your campaign, but if you whittle it down to channels and devices you can see which areas need focusing on more and improving.
For example, if you can see clearly that one device is suffering a lot more than the rest, then it’s time to change things up in your campaigns released on that device.
Cost Per Lead (CPL)
If the overall goal of your digital marketing campaign is to attract and convert leads, then you’ll need to work out how much each lead is costing your business. This will help you determine the total ROI for a particular campaign.
Image credit: Lyfe Marketing
If you find that your cost per lead is more than what each one is producing, you’re getting a negative ROI and should look to reshuffle future campaigns and approaches.
Lead Close Rate
It’s one thing attracting leads, but are you closing them? You should monitor the rate that you close leads to see how effective your campaigns really are. If you compare the number of closed leads to how many are simply generated then you’ll have an exact idea of how profitable the campaign has been.
Going forward, you can use this number as a benchmark for future campaigns. If you find that your campaigns are closing leads lower than the benchmark rate, then you can readdress them and aim to solve the issue.
It's all well and good generating leads, but are they moving through your pipeline quick enough? The last thing you want as a business is to have a stagnant pipeline because you'll end up burning through your cash when nobody closes.
Sales velocity is measuring how quickly deals move through your pipeline.
Hubspot, suggests the following equation to measure this;
Sales Velocity = Number of Opportunities x Deal Value x Win Rate / Length of Sales Cycle
By accurately and consistently measuring sales velocity, you're able to identify reasons why deals don't progress quick enough and then do something about it.
Cost Per Acquisition
This metric informs you of how much it costs to acquire a new customer. If you’re spending more than you’re returning then you’ll have a negative ROI. The formula to calculate your cost per acquisition is:
Image credit: Lyfe Marketing
As a B2B business, your ROI won’t solely rely on your website either. Every marketing channel that you utilise can be analysed. Typical cross-channel metrics that a B2B company would look at are:
- Email marketing. Open rate, click-through rate, bounce rate, unsubscribe rate, conversions, and leads acquired.
- Social Media marketing. Engagement rates, clicks and click-through rates, conversions, leads acquired, and new fans or followers.
- Landing Pages. Traffic, unique visitors, returning visitors, total page views, time spent on a page, actions taken, and conversions.
- Content and Copywriting. Traffic, clicks, time spent on a page, unique visitors, returning visitors, actions taken, and conversions.
Once you’ve started measuring your digital marketing ROI, you’ll come across areas that need improving. Here is some general guidance that you should follow that’ll definitely help increase your ROI.
Identify Your Goals From the Start
Quite simply, you need to know what the goals of your campaign are before you start. If you don’t, you’ll be heading in no real direction. Plus, how can you gauge the success of your campaign if there is no overall goals and objectives? You can’t.
The goals that you set need to be SMART goals. There’s no point setting vague goals like “increase awareness” as there is no way of judging how successful the campaign is. If you reach out to one more person you will have technically 'raised awareness' but is that all you were really aiming for?
A specific, measurable, achievable, relevant and time-bound goal is a great place to start for a campaign. It sets out what you’re aiming to achieve, when you’re going to achieve it by and how you’re going to achieve it. That way, all of your team are then singing off the same hymn sheet and pulling in the same direction towards the end goal.
An example of a SMART goal for a B2B marketing business would be - “convert 20 percent of leads into customers throughout the second quarter of the financial year.”
Nail Your Content Every Time
Content is a massive part of any B2B digital marketing strategy.that your potential customers will use to make their first impressions of your business. After all, first impressions are hard to undo so you need to make sure that your content is clear, thought provoking and engaging.
Businesses that see a negative ROI can usually make vast improvements in their content. Sometimes this is because they’re trying to do their content in-house when they don’t have a content marketing specialist within their team.
If this sounds like your business, consider hiring a content marketing specialist that knows how to engage and retain an audience. Content is king and is a valuable asset to your B2B business - it shouldn’t be overlooked or produced half-hearted.
Focus On Converting Leads - Not Just Generating Them
It’s all well and good driving in as many leads as possible, but what are they worth if you’re not converting them? Not much.
B2B marketing is all about spotting potential leads and nurturing them throughout the buyer’s journey until they become a customer. It’s not about passing as many poor quality leads to your sales team and hoping they’ll work their magic.
One of the main ways that you can up the chances of conversion is your sales and marketing teams working together - rather than against each other. Marketing teams can gain helpful knowledge of how to approach your customers from your sales team and vice versa.
Your teams all work for the same business, so align their goals and have them pulling together to achieve the same objectives. That way, there’s no conflicts of interest within your company that could cause issues.
Prioritise Improving Your B2B Tech Business’ Digital Marketing ROI
So, as you’ve seen from the above tips on how to improve your digital marketing ROI, you need to take your marketing seriously. Which means that you need to recruit properly for the role. A person who isn’t experienced or qualified enough isn’t going to give you the results that you’re chasing.
And in turn, your ROI will likely be negative. So, in order to increase the chances of improving your ROI, you should hire an account-based marketing specialist. Lucky for you, we’ve put together a free job description pack that includes everything you need to know about finding the right person for the role. Get your copy today.