Welcome to the first edition of Measurable Marketing Monthly. This report has come about as a result of our on-going work with clients who desire to achieve the greatest possible results from their marketing efforts without wasting a single dollar. We’ve created this report to share information with a wider audience. This report is free and will always remain free to Clicks ‘n Conversions clients and to those who subscribe while the report is free.

How to create a framework of marketing accountability

Not so long ago, marketing was treated as if it were magic. Business owners knew that some portion of their marketing investment was being wasted but no one knew what or how much that was. No one even cared about it too much because it was generally accepted that marketing was an art and a business owner was supposed to just believe that it worked.

Direct marketers – catalog companies, infomercial producers, and direct mail sales firms – knew all along that this was hooey. But many business owners became aware of this secret only recently due to two powerful enabling events. One is the emergence of the internet on which lead generation efforts, buyers’ decision processes and purchasing paths can be tracked and measured in almost real time. The second is the recession which put reduction of marketing expenses front and center in the CEO’s line of fire.

Now all smart business owners, executives and marketers are insisting on marketing efforts that produce tangible, measurable results. The pages that follow will help you get started (if you’re new to it) or firm up your program (if you’re more of a veteran). You may find yourself fighting marketers – both in-house and in outside firms - who still believe they shouldn’t be held accountable. Forge on. These are a dying breed.

1. Start with your sales goals and work backwards.

Marketing strategies and objectives should be tied directly to what and how much you want to sell. By keeping the end game in mind, you can establish logical requirements for your marketing efforts.

Turn sales revenue into new customer requirements. Assuming for the sake of this article that you want to focus your marketing efforts on generating new customers or new customer leads, it’s important to know how many of these new customers you will need. That’s easily determined by dividing your new customer revenue goals by your average new customer value.

This will tell you approximately how many new customers you need to bring onboard in order to hit your sales goals. Most companies find it effective to begin with annual revenue goals and annual customer value, but your business may vary.

Determine how many opportunities you need. In a complex sale involving a living sales staff, you probably use the term “closing ratio” to refer to how efficient the sales team is at taking a qualified sales opportunity (such as the chance to submit a proposal) and turning it into a sale. In a situation that doesn’t require human closers, you might look at trial-to-purchase ratio or some other metric. The important thing is to establish a point at which a prospect becomes a real and viable lead; and then determine what percentage of those leads become your customers.

This number tells you how many qualified leads you need to generate; how many free trials or samples you need to get people to try, or how many demos you must deliver.

Determine how many new prospects and/or website visitors are required. Just as only a fraction of your prospects will become qualified leads, not all of your website visitors will want to try your product. Figure out what percentage do try the product and you can figure out how many new prospects or visitors your marketing must generate.

Many business leaders take an educated guess at this percentage and adjust later as the real number becomes apparent. Others prefer to measure for a while to get a baseline number. Either approach will work – although the first one will get you a target number faster.

2. Set quantifiable marketing objectives.

Once you know how many visitors, prospects, trials or qualified leads you need, you can turn these into easily-measured objectives for your marketing program.

Commit your objectives to writing and make them known. It doesn’t matter if you have an in-house marketing staff or you outsource your program or you use some combination. Setting expectations as part of a job description or terms of engagement can’t help but lead to better results.

As part of setting marketing objectives you’ll also want to assign ultimate responsibility to a single person, allocate the resources they need to reach the objectives and then hold them accountable. As with any other part of business, if nobody “owns” the project, it’s unlikely to get done.

Break high level objectives into increasingly granular ones. Each marketing program, tactic or activity can have its own objective(s). For example, once you know how much website traffic is required, you can select the tactics to drive that traffic and then assign specific numbers to it. You may decide to invest in an on-going search engine optimization program, but how much traffic will that generate? At look at search volumes and anticipated ranking can help you determine a reasonable level of traffic to expect.

By going through the process of assigning reasonable objectives to individual programs, you can also evaluate various tactics against each other based on the cost per visitor or cost per lead.

Keep your eye on your sales objectives. Remember to tie all of your objectives back to sales or sales opportunities. This will keep you from getting distracted. In tough economic times, very few companies can afford to spend marketing resources on anything that doesn’t lead to a sale. Once the economy begins to improve, smart business leaders will continue to insist on efficiency.

3. Measure your progress.

Measuring your marketing results and progress today is so simple – and affordable – that it makes no sense whatsoever not to do it. This is especially true of internet marketing.

Decide what you want to measure. Web analytics applications – even the free ones such as Google Analytics – can give you more information than you could possibly use. Death by data is not an idle threat. Rather than allowing yourself to be overwhelmed with meaningless numbers, vow right now to measure only those elements that you can or will act upon.

Naturally you will want to measure overall website traffic and/or inbound leads, website bounce rate, conversion numbers and rates at various action points, and response rates that indicate the success (or lack of success) of active marketing tactics. Start with the basics and add additional elements as you get more comfortable with tracking and acting on the data.

Measure reality against your objectives. It’s one thing to know that you have 150 companies signed up for a free trial of your software. It’s another thing entirely to know that you should have 250 signed up by now. The former is just a number. The latter gives you something to act on – before it’s too late.

A simple chart for each major metric will do the trick. Use a line to represent your target, and columns to represent where you actually are. You’ll know immediately at a glance where you need to pay attention.

Share the data. Nothing keeps people focused quite like visibility does. Since people naturally like to succeed, regular presentation of results – and even posting charts – provides a clear and ever-present reminder of expectations. It also creates an opportunity for useful input from others on your team.

4. Do something about it.

Not surprising, setting objectives and measuring results are sometimes the easier parts of marketing accountability. Programs to make marketing accountable generally start off with great enthusiasm – along with pressure from the top. But little is achieved if no changes are made.

Ask for solutions along with reports. Accountability programs are much more effective when the person who is responsible for achieving the objective “owns” the data, presents the status reports, and is expected to articulate actions – or options – that can be taken to get back on track. Expect your people to come to you with answers as often as they come to you with questions.

Clicks ‘n Conversions can help. The marketing experts at Click ‘n Conversions have decades of experience in setting up measurable marketing systems. As a reader of the Measurable Marketing Report, we’re happy to have you contact us with your questions. Just respond by email or use any of the contact options listed at the end of this newsletter.

Additional Resources

For help in setting quantifiable marketing objectives, download a free copy of our How Many Leads Do You Need spreadsheet.

How to contact Clicks ‘n Conversions

We welcome your comments, questions and suggestions.