Would you hire an employee, pay them a salary and never check on their work, never set goals or measure performance? Of course not! Whether you work for a large company or a small business you have a limited amount of money to spend on salary, and you use performance measures to gauge whether you money is being well spent.
While most business owners understand this idea when it comes to employees, the don’t see that it applies equally well to their marketing! In a very real way, the $10,000 – $100,000 you are spending on marketing is like hiring another employee. Marketing metrics help you figure out if the money is being well spent.
Paying attention to the metrics helps you refine your marketing expenditures each year. However, it is easy to get bogged down with too many metrics. Ideally, you should measure things that:
- Drive or reflect business results.
- Can be influenced by your direct action.
- Can be measured accurately, consistently, and cost effectively.
The following excerpt comes from a business plan we wrote for a small firm, describing how they would measure marketing performance. Notice the specific and very measurable goal:
Relevant customer data and contact information is collected in ACT. The source of new customers is also captured. As e-mail campaigns are launched, “open” and “click-through” rates will be tracked to measure effectiveness of programs. Log files capture data regarding Web traffic.
We will budget $500 per month for search-engine optimization. We need to acquire three new customers each month from this program. In addition, by monitoring our results we will adjust Web copy to include the most popular search terms.
How do you measure marketing performance?