While most companies recognize the importance of metrics to measure and manage marketing performance, they often don't have the right formulas in place to get accurate results.
Twentieth century retail magnate and marketing pioneer John Wanamaker may have said it best when he claimed, "Half of the money I spend on advertising is wasted; the trouble is, I don't know which half."
And now, one hundred years later, this startling assertion still rings true for many of today's companies. They lose money each year due to misaligned investment budgets derived from inaccurate marketing metrics.
"We frequently find that companies either aren't asking the right questions or aren't looking at the right things when trying to determine the effectiveness of their marketing activities," said BrandExtract Chairman and COO Jonathan Fisher.
Imagine, for example, that you hosted an enrollment event. You stayed within budget and attracted 25% more prospective students than last year. Is that enough to gauge whether it was a success?
BrandExtract recently assisted a client facing this same dilemma. They were struggling with how to measure the success of their event, and used budget adherence and turn out as a means to justify it. However, BrandExtract's thorough assessment revealed that what the client thought was a good investment was actually costing them money because it yielded such a low return in comparison to their other marketing activities.
In order to determine true ROI in the example above, we need to dig deeper. First, cost per lead must be calculated, followed by cost per application (which is essentially your conversation rate) and finally cost per acceptance (or close ratio). The cost should always be factored on the close ratio, not leads or reach, which is a common mistake.
Since metrics drive budgets, understanding and implementing the right formulas is essential to the success of your business. They can identify which marketing activities aren't generating proportionate returns, thereby affording you the opportunity to restructure your budget for increased profitability.
BrandExtract has helped a number of clients increase the effectiveness of their marketing efforts and generate an increased ROI by assessing their current budgets. Contact us to see how we can do the same for you.