How to Measure Your Marketing ROI

Have a strong understanding of what tactics were effective for your firm.

In the last column (Sept-Oct issue) we discussed why measuring your marketing return-on-investment is important. This month we cover what to measure and how. Many people are surprised at the number of marketing efforts that can be measured.

What to Measure
Let’s start with some definitions. Marketing can be measured either quantitatively or qualitatively. Quantitative refers to marketing that can be expressed in numbers while qualitative is the quality of the response. Marketing output activity quantifies the efforts. Placements are the number of marketing pieces distributed and are a quantitative measure of the outcome. Awareness qualitatively measures the customer’s recall of the output. Attitude qualitatively measures the influence that the output had on a customer’s behavior. Contacts quantify the initial behavioral response. Finally, you should examine your sales with the overall marketing investment versus the results.

For example, measuring placements of marketing materials includes how many people received a direct mail piece or saw an advertisement or received a magazine article. To evaluate this, you multiply the circulation of the marketing piece by 2.5 to get an estimated reach of how many people saw the piece.

Historically, the common way to measure public relations efforts (such as a press release or article in a trade magazine) is to measure ad dollar value. To compute, multiply the length of an article by the advertising rate for that space in the magazine or newspaper. Since media coverage is earned, many experts argue that it is more credible than advertising, so it should include an additional multiplier of 10. The content analysis for public relations also includes examining the content for prominent placement, picture and key message inclusion, and lack of competitors mentioned. Further, the PR piece should be evaluated to see if the majority of a release, direct quotes, company name, product/service name, and contact information is included.

Measuring awareness requires more effort such as using surveys or other tools to determine if anyone remembers seeing your marketing communications. This is because it measures outcomes not output. Similarly, measuring attitude requires tracking studies, snapshot surveys, and focus groups.

To measure contacts, you need to evaluate it for each separate marketing effort. For example, for PR/advertising/direct mail, measure the number of placements or pieces mailed, ad equivalencies, response rate, conversion rate, average order, and cost. Similar measures can be used for trade shows and customer events.

Public relations has several other components that can be measured such as inclusion of the key message, quotes or bylines attributed to your firm, company’s name mentioned in the headline, no competitors mentioned, contact information included, and placement of the photo in the article. To assess and compare coverage, a numerical value can be assigned to each element.

For websites, measure click-in analysis, which tracks how many visitors came to the landing page versus the costs incurred to acquire those visits. The click-through analysis measures the people who came to the landing page and then placed an order.

Measuring sales is crucial to assessing marketing ROI. One of the simplest tactics is to ask prospects “How did you find out about us?” This lets you to learn from prospects what efforts are working and reaching them. It is also important to determine how much you are spending per sale. This can only be done if you are properly calculating ROI. Be sure to record your sales and customer information.

How to Measure Marketing ROI
There are five steps to measuring marketing ROI that you can begin implementing immediately.

Set measurable marketing goals that include quantification, deadlines, purpose, and an action plan.
Use multiple measurement tools to evaluate the program and individual tactics.
Agree on what is being counted such as identifying what you are trying to measure, what data you are collecting, and what data will look like in the final report.
Use existing measures before creating new ones such as company records, complaints, sales, and old surveys.
Arguably most important, effectively communicate and present the ROI findings. Your team needs to understand how marketing efforts impact the bottom line.

While tracking marketing efforts to show ROI takes some time and money, the results will definitely be realized when you sit down to make next year’s marketing plan. You will have a strong understanding of what tactics were effective for your firm. ROI gives you the necessary ammunition to ask for an increase in funds for certain tactics and also adds credibility to marketing efforts.

Kimberly Kayler

Kimberly Kayler, CPSM, serves as president of AOE, a full service association management and marketing consulting firm with special expertise in the concrete industry. A marketing professional with extensive experience serving technical industries, Kayler served in business development and marketing communications roles at engineering firms as well as an editor at Wright-Patterson Air Force Base before she started Constructive Communication, Inc. (CCI) in 2001. In 2018, CCI merged with CAM to expand its offerings to the industry. Rebranded as AOE, the firm provides association management, marketing, public relations, accounting, HR event planning as well as technical consulting to those in the design and construction industry. AOE’s client list includes more than 30 design and construction-related organizations and associations, as well as companies in chemical, aerospace and industrial sectors.

A past member of the Board of Direction for the American Concrete Institute (ACI), Kayler chaired the ACI Marketing Committee and is a past member of the Construction Liaison, Membership, Convention, Financial Advisory and Chapter Activities Committees. Past Task Group membership includes the International Conferences, 2030, Strategic Planning, Branding, convention Opening Session, as well as the Communications Platforms for Delivery of Services and Products. She also is the past chair of the Global Marketing and Research Task Group.

Kayler is Co-Founder of the Women in Concrete Alliance (WICA) and leads efforts to create networking programs for women in the concrete industry. In this capacity, she represented WICA on the U.S. Secretary of Transportation’s Women in Transportation Roundtable.

She has authored more than 2,000 articles and is the co-author of Leading with Marketing, a handbook for marketing and business development professionals. She has given presentations at the World of Concrete and for many industry organizations and associations during the last 20 years related to marketing, leadership and branding. In 1999, she was the first person in Ohio and one of the first 20 in the nation to earn the Certified Professional Services Marketer designation from the Society for Marketing Professional Services and she still holds this designation.

Since 2009, Kayler has served as an Adjunct Professor in the Integrated Marketing Communications Department at Columbus State Community College, Columbus, Ohio. She received her B.A. in Journalism from The University of Arizona, Tucson, Ariz., and her M.S. in organization and management with an emphasis in leadership from Capella University.

She can be reached at [email protected]