Proving marketing ROI can be a challenge for many reasons. When you market across several channels and several campaigns, it's hard to know which channel gets credit for a lead or sale. You may have the data to answer that question, but sifting through that kind of volume is overwhelming -- and impractical.
You struggle to pin cost or revenue down to one singular tactic or channel, as everything's intertwined -- SEO, Social Media, Google Ads, Content Marketing, Inbound Marketing ROI. Some industries are clearly more straightforward than others, such as eCommerce. Others, like SaaS or manufacturing, usually see more challenges because lead generation can get complicated fast.
On top of that, C-Suite typically does not care much for likes or shares (vanity metrics). In their mind, these do not have a clear and direct monetary value. And that certainly can be the case without a plan to leverage that engagement. Instead, CEOs are looking for how various efforts affect the bottom line. Here's how to show it.
Measure the Leads That Turn Into Sales
This is a sure way to know how much revenue is associated with each lead. Lead to Sales Ratio (or a similar revenue-focused metric) should be one of your key performance indicators (KPI) if it is not already. In marketing, it's easier to associate specific leads with campaigns and channels to show their source.
Not only will this help you prove marketing ROI. It will also show you which channels and campaigns deliver the highest-value leads.
Another common metric you can measure here is Marketing Influenced Customer %. This number will show how many customers marketing interacted with during the nurturing process. Show your boss that people became customers because of your marketing efforts. They wouldn't have been "sitting" with a sales rep without your efforts to:
- Attract the right audience
- Build trust with the right people
- Showcase your industry skills, authority, and reputation
- Communicate brand messaging, benefits, and considerations
- Guide that person to the sales department
All of that took marketing, and no solo ad, post, or piece of content accomplishes all that.
Track Leads from Various Sources
In many cases, proving ROI in digital marketing as a whole matters most to the CEO. They may say, "don't bog me down with details. Show me the results".
But what happens when the CEO sees some of your valuable marketing efforts as a waste of time? You need to know your ROI in digital marketing by source. This way you can demonstrate the value of a comprehensive inbound marketing plan that:
- Attracts - Certain sources focus on drawing in the target audience (buyer persona) at the right time.
- Converts - Other sources generate a lead you can then nurture to build trust.
- Closes - You may then have another source that helps you seal the deal.
- Delights - You shouldn't forget what happens after the sale. These sources increase lifetime value and promoter activity.
Let's say your CEO doesn't understand why you need a blog. They're pushing you to cut this "non-essential" so you can focus on Google ads that appear to deliver the most sales. First, develop a better understanding of which sources sales come from for yourself. When you do, you can more clearly show how your blog is delivering ROI, especially by increasing search engine traffic that becomes leads, then customers.
Make sure your CRM is set up to track leads from various sources.
This will prove where your leads are coming from and that your efforts are working. It will show how the various channels in your inbound marketing strategy work together to deliver leads that become customers.
Marketing Originated Customer Percentage
A common metric here is Marketing Originated Customer %. This percentage is a look-back metric. What percentage of people who are now customers interacted with marketing before becoming customers? Further, break this down by source to demonstrate the marketing ROI coming from each source.
Use Attribution Modeling for Bigger Picture Viewing
But don't let the data overwhelm you. Leverage attribution modeling in your CRM or analytics tool to consistently and easily get this number. Common attribution models include:
- Last interaction or touch - The piece of content, channel, campaign, etc., the lead touched last gets all the credit.
- First Interaction or touch - The first thing they interacted with gets credit.
- Linear - Each touch along the path gets equal credit
- Time-decay - Only the most recent touches get credit
Generally, multi-attribution modeling such as linear or time-decay gives you the best perspective on which sources contribute to sales. Often, a powerful motivator like a remarketing ad or email CTA finally convinces the lead to buy. But they never would have seen that ad or email without the content that brought them to your website. At the same time, you certainly would not want to give your blog full credit as the first touch in a first interaction attribution model. They worked together -- and likely with other sources.
Keep It Simple
All this data is useful to you as you plan and optimize your strategy to deliver the highest B2B marketing ROI. It helps you understand the ROI so you can communicate with the CEO. That said, don't overwhelm C-suite with too many numbers. Sum it up, by source only if needed. And present it to show your inbound ROI.
Measure Your Advertising Efforts
You won’t know where you’ll end up if you don’t set clear goals. Setting clear and visible ad campaign benchmarks will help you understand what type of B2B marketing ROI is possible and stay on track to achieve it.
Purchase Conversion Rate
This is especially useful when using paid ads to promote a new service or product. Here, you can use a Purchase Conversion Rate to measure ROI directly and determine the campaign's success. It can also help make informed decisions about refining the campaign.
Cost Per Purchase
This is another common way to measure ROI, specifically with advertising campaigns. How much did you spend per order? If you're inbound marketing, then that cost per purchase will go down because a greater percentage of people who click the ad (cost) will buy.
Before they even saw the ad, your inbound marketing content helped them research their options. So they're ready to buy.
Average Order Value
And don't forget about Average Order Value. Thanks to your smooth marketing efforts, when that lead does buy, they feel confident splurging on your more expensive packages. They're willing to spend more right from the start rather than sticking their toes in the water with a nominal first buy.
That only happens if you build trust before they become a customer. And that's what effective marketing does.
Target Existing Customers During Your Launch
You have a 50% greater chance of selling something new SKUs to an existing customer. And they're also likely to spend 31% more on subsequent purchases. Maximize the success of your launch by focusing first on your current customers. They'll help you get over that "no reviews" hump that all new products endure.
And because they know you, they'll also be more likely to generate good reviews or quickly let you know something's wrong. Now, you have a higher ROI to show the boss.
Show How Early KPI = Sales
If you have a more lengthy sales cycle, be sure to include downloads, webinar signups, demos booked, etc, even if those didn't lead to sales within the given period. Your CEO isn't likely to see these numbers as ROI over the long term. But in the short term, showing this ROI in digital marketing can float you through until those leads become customers. However, you need to show that a percentage of these do consistently become sales.
A huge part of showing marketing ROI is having the numbers that prove A does lead to B to C. If you have clearly defined buyer's journey-aligned inbound marketing funnels in place, then you can see and prove this.
But in order for this to work, you need to show how these numbers are directly related to customer acquisitions and ROI.
Remember That Marketing ROI Is Not Black and White
Marketing includes a plethora of activities that don’t always produce a clear numerical value. But they do add up over time to a desirable result -- lower customer acquisition costs and higher revenue. That's ROI!
For example, with inbound marketing, you're reaching people earlier in the buyer's journey before a competitor takes advantage of your slow start to capture that lead for themselves. But the natural side effect of reaching people earlier is that everyone may not be ready to buy now.
Take social media awareness campaigns for brand awareness. 54% of people research products and brands on social media. So clearly you need a social media presence. If you're not here, many people see your brand as less relevant. But social media alone does not generate B2B marketing ROI because these aren't impulse buys. Clearly define a path through which this awareness turns into a lead conversion.
Then employ email marketing to nurture leads to closing. Email continues to effectively nurture leads across demographics because it's:
- Easy to segment and automate (with email marketing tools like HubSpot)
- Accessible to the average business leader. You don't have to be super tech-savvy to use email.
- Easily complements other inbound strategies
- Doesn't cost much, considering how much it can do
- Emails have staying power. They remain in the inbox where they can be seen until the person clicks, junks, unsubscribes, or deletes. You're getting someone to make an active decision -- even if that means losing a poorly engaged subscriber. That's actually a good thing!
On top of email, you can create marketing materials that sales can use throughout the sales process. This sales enablement content promotes the brand with a seamless continuation of the branding messages you started.
And don't forget how important your website is. Most, if not all, buyer's journeys include visiting landing pages at some point. Your website can be your best salesperson. Do it right and it will consistently close the sale. LAIRE employed a growth-driven design and increased its annual website traffic by an astounding 511%.
Across all of your channels, sources, and strategies, content marketing is vital to producing information for leads. Helpful content attracts the right person at the right time. It manages objections, explains benefits, and gently yet directly guides a lead down a path. It does all of this in a useful, low-pressure, no sales gimmicks way that most people appreciate these days.
A consistent and well-researched content plan increases the visibility of the company website to potential customers in search results, social media, and influential sites.
First ask yourself: are you working with inbound marketing vs. outbound results? Measuring ROI is always important. But it's critical to understand that inbound ROI is naturally more complex to measure. That doesn't mean it has to be difficult. Just make sure you are using your CRM appropriately. That way, you’ll have an easier time proving ROI to your executives with direct attributes to various sources.
Remember that marketing is an investment and an ongoing process that shifts and moves as you adjust for different personas, trends, and strategies. The marketing campaign ROI data you collect allows you to make confident, data-driven decisions. And what's more, because you're collecting the data, you can see what happens when you make a strategic move -- often almost instantly.
Inbound isn’t for everyone. We're not the first to say that. But during our free marketing assessment, we can tell if inbound would be a good fit for you. It might be for you. And if it is, that's great because we can help you use inbound marketing to cut your acquisition costs while delivering more sales-qualified leads. Let’s discuss your marketing activities and how inbound could help with a marketing assessment. Check out these 5 tips to successfully review your marketing plan.