A Simple Marketing Review

As we enter the final days of 2008, I’m spending time with clients reviewing their marketing results in order to determine their marketing plan for the new year. You can do this yourself by spending a few hours looking at how your marketing has helped your business grow. Ask these questions and don’t be afraid of the answers. If your results aren’t the best, now is the time to make some changes.

What Are We Measuring?

Marketing is used to generate leads and awareness. You need to balance both so that you have the revenue you need to stay in business while developing your reputation or brand. Each marketing activity should be developed with a specific goal – i.e. public relations to build awareness and Google AdWords for lead generation. However, every marketing campaign will accomplish both at some level.

Can the business directly attribute revenue to marketing activities?

If you are not asking clients where they found your business, you are missing the opportunity to track your results. Make sure your Web site asks the question on the contact form. Train whoever answers the phone to ask the question, “How did you hear about us?”. Most people will tell you and you may just be surprised by their answers. By asking them, you get a better understanding of where your clients look for your types of services.

How much did you spend on each activity and in total?

First you should determine the cost of your sales tools:

• Web site / Blog (development / hosting)
• Business cards
• Brochures
• Promotional items (unless part of a specific campaign)
• Designer and marketing coaching fees

Then determine how much you spent on each marketing program:

• Internet marketing (Google Adwords / Yahoo Search / other sponsored ads / article marketing)
• Social media marketing
• Direct mail (printing / postage / list purchases / follow up)
• Advertising
• Networking and referrals (memberships in BNI / Chamber of Commerce / Better Business Bureaus)
• Public relations (fees to a specialist)
• Events (seminars, tele-clinics, etc.)

The Big Picture

Take the total revenue attributable to marketing and divide it by the total marketing dollars spent, including the sales tools and marketing services. This number better be at least 4 or more. If you are spending $1 and making $4 or better, you’re in good shape in general. Remember we’ve included all the “overhead” costs in this number which I do to make sure the business is covering all of its marketing expenses.

Which ones gave you the highest return?

Now we will measure each activity specifically. Take the revenue attributable to each activity listed and divide it by the marketing dollars spent directly on that activity. You can do each individual campaign or combine those that were developed to work together. For example, a direct mail postcard campaign would include the costs of the postcard design, print, postage and mailing list. However, you may want to measure your Internet marketing ROI as one major effort. Did you recoup your investment and then some (the number is greater than 1)?

Ideally you want at least a 3 times return or better or the campaign may not be worth your time and effort. In addition, you may want to use the money on something else. Look at each activity with a perspective on what you gain monetarily as well as from an awareness and reputation perspective. In a service based business, sometimes awareness and reputation are just as valuable as the dollar return.

What to do next year?

Now that you have a good idea about how your marketing has performed, you can determine what marketing you will invest in next year. Look at each activity and ask the following questions:

• Which activities were the most successful?
• Do they make sense to continue?
• Which activities were marginal? Do you know why? Could they be improved?
• Should I invest the money somewhere else?
• What new activities should I look at?

If your marketing is working, keep doing what is successful, eliminate what isn’t, and leave some room in your budget for unexpected marketing opportunities if they should arise.