4 Ways to Measure Your Marketing (+ Pros and Cons)
October 29, 2019 | Kirsten Lyons
Most marketing teams are on the hook to impact their business’ bottom lines, which makes how you track and measure the success of your efforts even more important. In fact, marketing departments that measure their ROI are 1.6 times more likely to receive higher budgets.
There are dozens of ways to measure your marketing, but not all of them are created equal. In this post, we examine 4 common ways to track marketing success to help you find the right approach for your team.
Many marketers choose the number of marketing qualified leads (MQL) they capture to measure their efforts. In general, MQLs are leads who have been identified as more likely than others to convert based on internal criteria.
Ideally, marketing and sales teams work together to define MQL criteria, but, using this approach, marketing is measured on the quantity of leads they produce, not their impact further down the sales funnel.
Pros: MQL targets are simple to track, and can be a leading indicator of interest and awareness.
Cons: Because this metric prioritizes quantity, there is no incentive or tracking system for marketers to assess the quality of leads they deliver. This often leads to reduced lead quality and low conversion rates at the next stage in their journey.
MQL to SQL conversion rate
Your MQL to SQL conversion rate is the percentage of marketing qualified leads that convert to sales qualified leads. If this percentage is high, it indicates that marketing and sales are using similar criteria to screen for lead quality.
MQL to SQL conversion rates can also be helpful to assess the effectiveness of marketing lead nurturing efforts. Only between 5 and 15% of leads are sales-ready when they’re generated. But by watching your conversion rates compared to the kind of nurture efforts they received marketers can assess their effectiveness.
Pros: Can improve marketing and sales alignment, centers lead quality.
Cons: Only part of the story is being told. This approach doesn’t follow leads to the end of the process to assess marketing’s impact on the business.
Cost per lead
Measuring your cost per lead means tracking the amount of spend required to capture a single lead. CPL highlights how effectively marketers use their budgets—the lower the cost per lead, the more effective the marketer.
Cost per lead can be measured for a specific campaign, or for your marketing efforts as a whole. This formula will help you assess your efficiency whether you’re considering one campaign or your entire budget.
Pros: This approach highlights budget efficiency and can improve your case for future resource investment.
Cons: This metric highlights cost of acquisition, not necessarily what happened to the leads after they converted. Supplemental conversion metrics should be used.
Campaign ROI can be one of the most useful metrics to understand and scale the most effective aspects of your marketing. Tracking this metric allows marketers to have a breakdown of the value each of their campaigns drove, relative to the cost. Once you know what works best, you can optimize future campaigns to drive even more revenue.
In general, ROI (or return on investment) can be assessed with the following formula:
(Revenue – Cost of goods sold) / Cost of goods sold = ROI.
By tracking leads through the sales process via marketing automation and CRM, marketers can assess the revenue each lead generated. That figure can then be used in the formula above to assess campaign ROI.
Pros: Marketers can easily pinpoint which campaigns to invest resources in to drive the most value for the business
Cons: This process requires more sophisticated marketing technology and coordination with sales
There are as many ways to measure marketing success as there are marketers doing it. by evaluating the strength of your measurement approach (as well as your results) marketers can ensure that they are getting the full story to drive the best results.
Ready to up your marketing measurement game? Take a deep dive into marketing measurement approaches that help you prioritize high quality leads in our ebook.