Form a Hypothesis, Design an Experiment and Test Your Results
While B2C businesses seem immediately able to evaluate the success of their campaigns with a vast array of metrics, B2B companies have typically struggled to connect data with their marketing efforts. For example, if you’ve ever taken a deep dive into Google Analytics, you know plenty of data is available, but defining which metrics matter for your business often proves to be a greater challenge. We’ve developed a different way to think about marketing and branding ROI that focuses on the one measurement that matters most: how others value your business.
As you consider the ultimate goal of increasing your business value, the process of determing how effectively your branding and marketing contributes to this success may feel daunting. Due to typically longer sales cycles in B2B environments, attribution becomes more difficult, and the steps along the buyer journey appear subtler. A recent study by Corporate Executive Board reports that nearly 60% of a typical purchasing decision is made before a customer ever contacts a supplier.
Despite these obstacles, executives still need a strategy to connect branding and marketing ROI with the overall value and performance of their business. When you understand which of your efforts performs best, you can build on these initiatives and search for additional opportunities. Acknowledging less successful or ineffective tactics gives you the opportunity to adjust your approach or redirect your investment and focus on a more profitable channel.
Many executives claim to approach the calculation of marketing ROI like a “science,” looking for a one-size-fits-all formula that spews out all sorts of data, from tweets-per-minute to the number of competitors’ backlinks. Yet it hardly seems possible that one uniform process would be useful for every business or could speak to company-specific goals.
In order to target the most valuable data that corresponds to greater business goals, we encourage our clients to evaluate the ROI of their branding and marketing efforts with an approach that truly embodies the scientific spirit. Our President, Bo Bothe, uses the analogy of a strategic experiment – whether you prove or disprove your hypothesis, your findings remain valuable to refine your marketing plan and hone in on your greatest possible ROI.
Learn how to assess your marketing or branding ROI by designing an experiment, running strategic tests, and proving or disproving a hypothesis – all while building the value of your business.
Create a Basis of Research: Use Your Marketing Strategy to Define Success
Before you can measure the success of your marketing efforts, you need to determine what it is you expect to accomplish. Your marketing strategy is the foundational research and planning phase that allows you to carry out the rest of the ROI measurement process.
It’s easy to get sidetracked by all the things you can measure. But a smart marketing and brand management strategy with clearly defined objectives allows you to gauge success against your company’s short-term marketing and long-term branding goals – the only goals that add meaningful value to your business.
Stop trying to hit arbitrary benchmarks for randomly selected metrics. For example: by the end of month, you might decide you need to get 20,000 page views on your website. Unless you can prove why those 20,000 views will drive business results — and how that makes your business more valuable — you won't uncover a useful picture of ROI until your marketing initiatives and measurement efforts are based on your overall business strategy.
Construct a Hypothesis: Which Goals and What Measurements Matter To You?
Every company brings its own values, processes and cultural nuances into how it approaches business. Even companies working in the same industry or market space may be focused on entirely different goals.
Depending on the direction of the overall business strategy, certain information will hold a different amount of value for each company. Define which measurements are most important to showing an increase in your brand value, and try to be consistent across your strategy. You may be able to find several different metrics that indicate progress towards the same goal.
Business Examples: Select Key Performance Indicators
For example, imagine two companies: a software business and a consulting firm. If the software company stakes its value around the exceptional usability of its product, the metrics that will measure whether this message is effective and authentic will likely be different than the metrics valued by a consulting company that promotes the strength of their client relationships. The software company who values usability will likely want to monitor comments and ratings on their trouble shooting resources or the number and type of support calls and emails. The consulting firm that stakes its brand on great client relationships could look at the average length of these relationships over time or how many new clients have been referred by existing ones. This approach allows both targeted sales and supports the overall value of the brand.
Develop a strategy based on your goals
- Build a hypothesis around how your marketing or branding efforts will help you reach your overall strategic goals.
- Choose a few metrics to monitor as key success indicators. Focus on metrics that align with your identified business objectives. Know why your chosen metrics matter, and the outcome you hope to achieve.
- Look for results that indicate quality or demonstrate that your audience views your business as increasingly valuable. Depending on your goals, examples might include employee or customer satisfaction scores, profit margins, sales volume, recruiting volume, market perception studies or even a corporate valuation.
Design An Experiment: Target and Refine Your Marketing Efforts
While thinking of your marketing efforts as an experiment may be unnerving at first, the alternative is much more damaging. Too many companies make assumptions about what works in marketing without the research or testing to back them. Rather than trying to prove that your marketing works, shift your mindset to focus on uncovering what works for your brand.
If a company has invested in billboards for years, the tendency is to keep doing billboards. But how do you know those billboards are working optimally? Are they the best channel to invest in? The media company can usually provide information about reach or impressions based on a general formula, but your brand is unique, and so are your customers. Experimentation allows you to target not just any customer, but your customer.
Start by knowing your audience.
Surprisingly, many executives don’t know specifically what makes their customers happy. They may say, “Well, it’s our service.” But what about the service? And how do you know for sure?
Stop making assumptions. Ask your existing clients: “How do you want to hear from us? What’s the best way for us to engage? How can we improve your satisfaction?” There are many ways to engage your customers: in-person visits, phone calls, articles, emails and more. Discover which medium they prefer or where they go to get information, and then target it. It is cricital to determine not just what they need to hear, but "how" they need to hear it.
Design a campaign based on this audience research. Aim to produce the type of content your customers want to engage with, in the places they want to see it, and as frequently as they desire it.
Set parameters and expectations.
Begin measuring right from the start of your marketing or branding initiative, based on the goals you laid out in your strategy.
Depending on your strategy and chosen tactics, different campaigns will require different lengths of time to reach their full potential. Rather than pulling all campaigns that may start slowly, a wealth of research and a strong strategy will allow you to make small adjustments and refine your hypothesis as you continue to test it.
Business Example: Monitor for Success
Remember our example software company from before. Since they've determined that a strong reputation for usability is a core goal for their long-term success, perhaps the company chooses to launch a digital marketing campaign around ease of use and customer satisfaction. To understand how these efforts impact the valuation of their company, they may choose to measure data such as the average user satisfaction rating before and after the campaign, engagement with support resources or monitor sentiment about the product in relevant forums or social channels.
If there is no measurable, meaningful response in the key areas identified by your strategy, you can stop investing in those efforts and try a new approach to reach your goals. This pivot stops the long-term budget leak that organizations typically experience due to an inability to optimize their efforts. There is value in both proving and disproving a hypothesis.
Test one variable at a time to gauge results.
A PPC campaign, for example, may need to run for several months before you gather enough data to fully evaluate its effectiveness. Throughout the duration of the campaign, however, you can make changes to A/B test different elements and methodically improve the ad’s performance. Try a new CTA or swap out the picture. Similarly, if you send an email that earns a low open rate, you can adjust an element (headline, content type, etc.) for the next email in the campaign.
Some efforts, like a thought leadership series, take longer to gain traction. Keep measuring as you go, and pay attention to which pieces and messages perform the best. Try to understand why these approaches were successful, and then test your theory to see if you can recreate the success. Beyond general quality or content type, don’t forget to consider other factors, such as your promotion channels or the timeliness of the piece.
Business Example: Make Adjustments
Consider for example, the consulting company that knows they need to develop strong customer relationships in order to increase business value. They learn from their research that customers gain confidence and extend relationships with consulting firms that are seen as seen as leaders and innovators in the industry. Based on conversations with their current clients, they may learn that their audience enjoys reading weekly industry insights. It makes sense that this company would hypothesize that a thought leadership program will deliver significant ROI towards their goal. The company can then design an experiment around this information, testing variables such as delivery method, content type, topic choice and more.
Evaluate Your Approach: Analyze Your Data and Communicate Results
Measuring the success of your marketing and branding initiatives requires substantial effort and must be consistently revisited and refined.
With a research-based marketing strategy, your long-term objectives will remain intact, but the marketing and communications tactics you put in place around them can be adjusted based on performance towards your goals.
- Measure one initiative against another. Decide which channels, delivery methods, frequencies and messages are most worth the investment of your time, money and effort. Continue to evaluate performance against your greater business goals and their reflective metrics, limit your variables and resist being distracted by less relevant data.
- Continue to study your audience for information. Analyze the leads that come in to see if your marketing efforts are successfully targeting relevant, qualified leads. A campaign may generate a high volume of inquiries, but if they're not the type of clients you want, the campaign needs more adjustment. Assess the value of your results by how they contribute to your strategic goals.
To extract the most value from your marketing and branding efforts, place the necessary support behind your team. This applies organization-wide – if you do not have the right people selling and delivering your product, this will also impact your return on investment. Operational delivery is key to driving successful campaigns and sustainable brand value. Actively communicate your strategy throughout your organization so employees can work in concert towards a goal. Building the value of your company is a community-driven, iterative process that must be tried, tested and evolved over time.