How to Effectively Track Marketing ROI for Your Small Business
The only way to know if your marketing is working is by tracking your return on investment – otherwise you’re just shoveling money into a hole and hoping for the best! That isn’t to say shoveling money into a hole can’t work… many small business owners do this for years with some degree of success. However, if you want to get the most from your digital marketing it is absolutely essential that you start tracking its performance in relation to its cost!
At Cut Throat Marketing we specialize in marketing for small home service businesses, so this article will be an in depth examination of marketing tracking and analytics specific to this industry. If you’re in e-commerce, retail, or food service your KPIs will differ, but this article may still offer you some insights into how to track your marketing ROI.
Why is it important to track your marketing?
You probably are of the opinion that tracking marketing is important, otherwise you wouldn’t be reading this article! However, here are the reasons why we at Cut Throat Marketing believe that tracking is important:
Tracking allows you to determine success
This is the crux of the matter. If you don’t measure your marketing performance, you will not know if it is working.
Tracking lets you see if your marketing efforts are paying off. Remember, every dollar you spent on marketing is a dollar not spent on a new truck, better pay for employees, or going into your pocket. However, if those ad dollars are coming back tenfold, then it’s worth your time!
Tracking marketing campaigns allows you to set meaningful goals
Want to increase your customer acquisition, reduce cost per conversion, or reach new audiences? These are great objectives, but without knowing how your marketing is currently performing these goals are meaningless.
Tracking lets you set realistic goals and see how changes in your marketing strategies move you towards or away from them.
Tracking marketing campaigns helps you optimize your spending
Marketing without tracking is a great way to end up spending too much money on underperforming strategies, or underspending and missing out on great opportunities!
With the right tracking in place your marketing budget becomes a part of a simple math equation: spend X dollars on marketing and generate Y dollars in additional revenue.
Website Tracking
Your website should be a tireless employee – working 24/7 to generate leads. Tracking your website analytics lets you see where it may be underperforming, quickly identify technical issues, and better understand your customer’s desires.
Primary KPIs
Small service businesses generally only care about a few primary KPIs, or key performance indicators that directly drive revenue in the form of leads. Specifically, websites can generate leads in three main ways: phone calls, form submissions, and web chats.
- Phone calls: In order to accurately track phone calls you must use a tracking number. This number routes calls through a service which tracks the number of calls, as well as their duration. Call tracking is amazingly important and it is not enough to simply count the number of calls coming into your office as you won’t be able to tell if an increase is due to your website, Facebook ads, mailers, or just random chance.
- Form Submissions: Form submissions can be monitored via Google Analytics by setting up event tracking. If you are using a form plugin that plays nicely with Google Analytics, you may be able to set up conversion tracking within the plugin itself.
- Web chat: Web chat software generally includes their own analytics tools, and may or may not integrate with Google Analytics.
Finally, there are a variety of software suites which can provide tracking for phone calls, form submissions, and web chats all in one place. We recommend Ninja Inbox, but Whatconverts is another tool which offers similar functionality.
Secondary KPIs
While primary KPIs are the most important metrics to keep an eye on, secondary KPIs can provide valuable insights into how your online marketing, SEO, and website is performing and should not be ignored. These metrics include website visits, bounce rate, conversion rate, time on page, traffic by source, engagement by source, and conversions by source.
While none of these numbers is directly tied to revenue, they have a strong influence on lead generation.
- Website visits: If overall website traffic goes down, you can expect lead generation to go down. Similarly, more traffic generally results in more leads.
- Bounce rate: This number tells you what percentage of your visitors arrive and then immediately leave. A high bounce rate is a problem for two reasons. First, Google uses it as a ranking factor, and second it may indicate that your ad campaigns are bringing people to your site who aren’t interested in your service!
- Conversion rate: This metric is the percentage of your site visitors who ultimately end up contacting you for a service. What constitutes a decent conversion rate varies by industry, with 1 to 5% being fairly typical. Higher priced services often have lower conversion rates – if only because customers spend more time researching their options and may visit your site multiple times.
- Time on page: This KPI can be a good way to learn what your customers care about. Generally, longer time on page means more interest.
- KPI by source: Breaking out your KPIs by source helps you learn where you are best able to reach your audience. If your Facebook conversion rates are dismal when compared to your Google organic search results, then you may want to rethink your social media ad campaigns.
Google Business Profile Tracking
First things first: if you don’t have a Google Business Profile you are missing out on the best free marketing tool available. We have found that as many as a third of our clients’ leads come from their GBP listings!
Don’t know what a GBP listing is? In brief: it is an account that allows your business to show up on Google Maps! Check out our article on how to set up your GBP.
Your GBP listing acts a lot like your website, giving prospects information about your business as well as the means to contact you. A great feature of GBP is that Google provides you with in-depth analyses of your listing’s performance indicators – letting you see in real time how it is performing.
Your GBP listing acts a lot like your website, giving prospects information about your business as well as the means to contact you.
A great feature of GBP is that Google provides you with in-depth analyses of your listing’s performance indicators – letting you see in real time how it is performing.
Primary KPIs
Again, the primary KPIs are going to be basically the same as those on your website, although with a few additions. Calls, messages, and bookings (if enabled) all directly reflect lead generation.
Direction requests to your business (if applicable) can give you an indication of consumer interest.
A somewhat different KPI to keep track of is reviews generated. Getting reviews is one of the best ways to build trust with potential customers and is an essential part of running a successful service business.
Struggling to get reviews or find the process to be a perpetual grind? Check out our guide on how to get more Google reviews with less work.
Secondary KPIs
As before, secondary KPIs support your business’s primary objective of generating leads, but do not necessarily correspond to lead generation in a one-to-one fashion.
The ones to keep an eye on are clicks to your website, and number of impressions on Google Maps. These both help you gauge interest in your business over time and can give you an idea of whether or not your marketing plan is working.
Google Ads Tracking
Up until recently Google Adwords required a deft touch and a bit of luck. Nowadays, Google has developed AI-driven ad campaigns that rely on accurately collecting conversion data to optimize the ads. We’ve found that these ads convert much better than ad campaigns of past years – as long as you feed Google the information it needs!
Primary KPIs
At risk of sounding like a broken record, the primary KPIs for service businesses are phone calls, form submissions, and webchats. Helpfully, Google’s tracking tool lumps all of these in together as conversions.
Secondary KPIs
The secondary KPIs for ads include some very important data points that are absolutely essential for running a cost effective ad campaign. Ultimately, it all comes down to cost per click, and conversion rate, which together can help you calculate your cost per conversion.
With this number in hand, business owners can have a reliable estimate of how many leads they will generate for a given cost. This is great information because it lets you buy as many leads as you want. When business is slow, turn on the lead faucet. When business is booming, dial it back in favor of free organic lead generation.
Other secondary KPIs that are worth keeping an eye on are: impressions, interactions, and interaction rate. These numbers give you insight into how many people are seeing your ads and whether or not the ads are appealing to those who see them.
Social Media Tracking
While not every service business has a social media presence, having one is a good way to build brand awareness and in some cases may even be a good way to attract new customers.
Primary KPI
At this point you should be able to guess the primary KPIs: phone calls and messages! For service businesses, leads are the goal and everything else is secondary.
Secondary KPIs
Metrics that track user engagement tend to be the secondary KPIs that matter. Number of followers, likes, shares, and comments all can show you how much your customer base is engaging with your content. You can also track the click-through rate of your social media posts, tracking how much traffic social media is driving to your website.
You may notice that certain types of posts garner more attention than others, and this can help you craft social media marketing campaigns that better resonate with your target audience.
Email Marketing Tracking
Email marketing is a powerful tool that many small businesses don’t fully take advantage of. Odds are your customer relationship management software (CRM) is already populated with hundreds, if not thousands, of customer and prospect email addresses – so you’re already most of the way there!
Monthly newsletters, promotions, and reactivation campaigns are inexpensive and effective ways to boost revenue.
Primary KPIs
You know the drill! What do we want? Phone calls, form submissions, and webchats! Leads are king.
Secondary KPIs
Emails have a few unique secondary KPIs that are worth tracking:
- Email bounce back rate: This refers to the percentage of sent emails that could not be delivered to the recipient’s inbox. Bounces can be categorized as either “hard” (permanent issues, like an invalid email address) or “soft” (temporary issues, like a full inbox). A high bounce back rate could indicate problems with your email list quality.
- Open rate: Open rate measures the percentage of recipients who opened an email. It is an important indicator of how engaging your subject lines and content are to your subscribers. A higher open rate generally suggests that the email campaign is resonating well with the audience.
- Unsubscribe rate: This crucial metric shows the percentage of recipients who opt-out or unsubscribe from your email list after receiving an email. A high unsubscribe rate might signal that the content is not relevant to the subscribers or that they feel they are receiving too many emails.
- List growth rate: The list growth rate represents the rate at which your email subscriber list is growing, taking into account new subscriptions, unsubscribes, and other factors like bounced emails. A positive list growth rate is typically a good sign and indicates that more people are interested in receiving content from the business.
- Click through rate: This measures the percentage of email recipients who clicked on one or more links contained in an email. This metric provides insight into how engaging and effective the email content is in driving readers to take a specific action, like visiting a landing page, or making a purchase. A higher CTR often implies that the content is compelling and the call-to-action is working well.
Billboard, Radio, and TV Tracking
Traditional marketing media like billboards, radio and TV ads aren’t dead and can still be good tools for generating leads and increasing brand awareness.
The only KPI of note is leads generated – and this is best tracked by using a unique website on your advertisements. The URL can either redirect to your home page or service lander, or take customers to a page tied to a promotion that is being advertised.
We have found that phone numbers don’t tend to perform as well as URLs, and generally recommend that businesses avoid using phone numbers in these types of advertisements.
Mailers Tracking
Mailers are not as common as they once were, but can still be a part of an effective marketing initiative. The best way to track the performance of mailers is to use a dedicated tracking number or a QR code that goes to your website and reports back to your analytics software about where the traffic originated from.
Remember, tracking numbers are only helpful if they are unique. Do not use the same tracking number from your website on your mailer!
If you’re not measuring, you’re just guessing.
This list might seem exhaustive, but the reality is that there are many other data points you can track! The metrics listed above are those that we think are most closely tied to your bottom line, and thus the ones you should definitely be paying attention to.
Ultimately, tracking is an essential part of an effective marketing campaign and should be integrated into any plan from the start. If you’re ready to start a new marketing campaign and want to talk about your options for marketing analytics and tracking, we’re here to help!