Is Your Marketing Actually Working? Here’s How to Evaluate Its Performance
Marketing is an essential part of any business. However, it can be challenging to determine whether your marketing efforts are yielding results. Without effective evaluation, it’s impossible to know whether your marketing strategy is working or not. In this article, we’ll discuss how to evaluate if your marketing is working, providing you with some tips to help you measure your marketing success.
Simple Marketing Evaluation
Your marketing spend should generate a return on investment (ROI)
3x – Expected ROI
5x – Good ROI
10X – Amazing ROI
If you spend $2,000, you should generate 6k-20k.
One way to do this is by applying a lead source to all jobs that come in and then track the revenue by lead source.
2 Parts to Marketing Performance
Marketing to Leads
When calculating your ROI you can see how many leads were generated and then figure out the potential revenue generated. For example:
$200 spent
10 Leads
$20 per lead
$400 avg sale
10 leads x $400 avg sale = $4k in potential revenue
This is one way to evaluate performance of marketing efforts. Marketing companies sometimes say, “We can’t close the leads for you”. However, if the leads are not good then it really doesn’t matter which is why its important to also track marketing for jobs booked.
Marketing to Appointments Set
In this scenario, we are going to look at marketing that led to a job being booked. Here is the example:
$200 spent
10 Leads
5 appointments booked (50% conversion rate)
$40 per appointment
5 appointments x $400 avg sale = $2000
This example shows a 10x return on marketing spend, so this would be a successful campaign.
Be Sure to Set Clear Marketing Objectives
The first step in evaluating your marketing strategy is to set clear objectives. Objectives should be specific, measurable, achievable, relevant, and time-bound (SMART). Setting SMART objectives will help you determine whether your marketing strategy is successful or not.
For example, if your objective is to book x amount of jobs, you should have the proper method to track this result. Most CRMs (Client Relationship Managers) have a lead source option to select “how you heard about us”. This will help with your reporting.
Define Key Performance Indicators (KPIs)
Once you have set clear objectives, you need to define key performance indicators (KPIs). KPIs are specific metrics that you can use to measure the success of your marketing strategy.
For example, if your objective is to book 20 jobs this month, your KPIs could include the number of leads, calls, and webforms from this specific marketing channel. By tracking these KPIs, you can determine whether your marketing strategy is producing the desired results.
Use Data to Measure Marketing Success
The next step is to use data to measure the success of your marketing strategy. You need to collect data on your KPIs regularly.
There are many tools available that can help you track and analyze data, such as Google Analytics or your CRM. By using these tools, you can get a better understanding of how your marketing efforts are impacting your business.
Analyze the Results
After collecting and analyzing data, the next step is to analyze the results. You need to compare your KPIs against your objectives to determine whether your marketing strategy is working or not.
If you have good data, you can make a simple spreadsheet like this:
This will give you a quick glance at the performance of each marketing channel.
How to evaluate a marketing company’s performance
A good marketing company will provide reporting like the above to show lead growth, estimate growth, job growth, etc. broken down by lead channel. If you do not have a CRM to track data down to the dollar, they can still use Google Analytics or other reporting tools to generate an ROI for you.
Honest Marketing Company For Local Service Businesses
We literally started Phlash Consulting out of frustration with the current state of marketing agencies. We strive to be a revenue-producing asset and not another liability on a company’s P&L. If you are unsure of your marketing ROI or are looking for an analysis of your current marketing, set up a 30-minute call with us to discuss your business.
Frequently Asked Questions
What is the importance of evaluating your marketing strategy?
Evaluating your marketing strategy helps you determine whether it’s producing the desired results and adjust your strategy to better align with your business goals.
What are key performance indicators (KPIs)?
KPIs are specific metrics that you can use to measure the success of your marketing strategy.
How can customer feedback help evaluate your marketing strategy?
Customer feedback helps you understand how your customers perceive your brand, products, or services and identify areas that need improvement.
What is return on investment (ROI)?
ROI is the ratio of the profit generated by your marketing efforts to the cost of those efforts. It helps you determine whether your marketing strategy is producing a positive or negative return on investment.