by Fronetics | Nov 5, 2015 | Blog, Content Marketing, Data/Analytics, Leadership, Marketing, Strategy
We all want to see the fruits of our labors. Whether launching a product or a new social media campaign, we look for instantaneous numbers that will affirm we made the right choices. But here’s the problem: not all metrics are created equal.
So-called vanity metrics are measurements that have no bearing on your bottom line but can give you an inflated sense of success. Generally, they are easy to calculate but are influenced by too many factors—and are too vulnerable to random external events—to be reliable.
Website visits and number of subscribers are two classic examples. A spike in homepage hits may be the result of your marketing efforts, or it may be because of ghost spam. (Or, both.) Regardless, more visits do not necessarily correlate to increased revenue—just more visits. In the same vein, having 100,000 email subscribers means nothing if only 1% are opening them. You actually could be losing money in terms of resources allocated if the emails aren’t helping drive sales.
That’s why it is crucial to focus on return on investment instead of vanity metrics. You could waste hours reviewing a hundred different analytics that tell you nothing about how revenue was affected by a particular effort. Or, worse, you could use vanity metrics to justify decisions that don’t achieve their ROI.
As a simplified example: say you spend $100 on a banner ad for a new product on an industry conference website, and your analytics report that 100 people clicked through. This sounds like success! But don’t celebrate just yet. When you dig past the vanity metric, you find an extremely high bounce rate. That means most of those click-throughs left your site immediately, neither engaging with your brand nor moving any closer to becoming a customer. In fact, you find that only one click-through converts. Was it worth paying $100 for this one customer? Probably not.
But say you ran another $100 banner ad on an industry publication website, one that targets a younger audience than you think your product fits. Only 20 visitors clicked-through, which sounds less successful than the other ad. But when you follow those 20 click-throughs down the sales funnel, you see that 15 ended up purchasing $1500 worth of product. Already, the ad has paid for itself 15 times over. You’ve also learned that perhaps a younger audience is more suited to this product. The ROI proves the vanity metric was quite misleading in this case.
Lean-startup pioneer Eric Reis, who coined the term vanity metrics, said, “The only metrics that entrepreneurs should invest energy in collecting are those that help them make decisions.” In other words, measure the things that will tell you if an effort was profitable so you know where to put your time and money.
While vanity metrics tell you nothing about your bottom line, ROI can help you determine whether it was worth spending your resources in a particular way. This is extremely useful on platforms like blogs and social media, where things are constantly changing. Using ROI as a litmus test, you can keep experimenting and making sure you’re using these tools effectively. Tracking a vanity metric like number of followers, which is likely to build over time regardless, gives you no indication of which experiments were successful and which weren’t.
Your resources are limited, so it’s crucial to evaluate your efforts with meaningful numbers that illustrate their effect on your bottom line. Calculating ROI might take some time—both in the few extra minutes to do the math and the amount of time that needs to pass before all the data is available—but that number will be infinitely more valuable to you than any vanity metric on your Google Analytics report.
What metrics do you report to your team?
Related posts:
When it comes to marketing we work with our clients to create and execute strategies that drive success and elevate their brand position within the industry. Unlike other firms, we align marketing programs with business objectives and, through a data driven approach, are able to deliver results with a targeted ROI. Our team is comprised of strategists, marketing professionals, writers, designers, and experts in social media. Together we leverage our experience to increase brand awareness, position our clients as thought leaders, drive meaningful engagement with prospects and customers, and help businesses grow. Learn more
by Fronetics | Aug 4, 2015 | Blog, Content Marketing, Logistics, Marketing, Supply Chain
Do reverse logistics companies need to focus on content marketing? Yes.
Should they use LinkedIn? Yes. Twitter? Yes. YouTube? Yes. Yes. Yes. Should they blog? Yes!
Several reverse logistics companies are already using content marketing in an effort to connect with peers and potential B2B consumers. IT Asset Disposal (ITAD) company, TradePort, has an informative blog and utilizes LinkedIn, Facebook, and Twitter. The large 3rd-party logistics (3PL) company, Unyson, utilizes the top B2B social media outlets with just under 2,000 followers on Twitter and just over 3,000 followers on LinkedIn. On the homepage of their website you can view a running tally of how much money they have saved their customers. At the time of the writing of this blog it’s at $2,055,763,398.
What the studies show:
The Content Marketing Institute reports that 8 out of 10 people identify themselves as blog readers, and 23% of all time spent online is spent on social media sites. With the rise of the blog, companies have gotten smart about how to reach their current and potential consumers. According to Forbes, many brands are moving their advertising budgets from television to online videos.
In the B2B world things are changing, too, with many executives wanting to gain information through other mediums. The Content Marketing Institute also reports that a majority (80%) of business decision-makers prefer to get information from articles rather than through advertisements.
We know that inbound marketing is effective in garnering consumers’ attention. It’s aligned with a generation of people who want to be educated about the products they’re buying and who are willing to search for those products online. Even with all of this known, it’s important to ask: what is the ROI when it comes to content marketing?
Return on Investment
In order to calculate ROI, the cost of content marketing needs to be assessed:
- salaries (if going in-house)
- marketing agency or contractor services
- additional overhead
- distribution costs
- design and publication software
After those costs have been calculated, the next step is to subtract that number from the revenue generated. The Guardian has put forth its simple content marketing ROI calculator:
(Revenue Generated – Cost of Content Marketing) / Cost of Content Marketing = ROI
According to the newspaper, “A simple calculation could say that you drove 1000 visits through a piece of content, and Google Ads would have cost £1 per click, e.g. £1000 to equal the same. If the content only cost £500, you have a saving!”
But with most seemingly simple things, there’s complexity underneath. Dig deeper and ask more questions:
- Is the money you’re spending on inbound marketing deterring other, less obvious, costs?
- Would it have cost you more through outbound marketing methods to achieve that same level of visibility than through inbound marketing solutions?
- Is inbound marketing bringing in customers or closing a deal more quickly than alternative methods (time is money, after all)?
- Is inbound marketing cutting down the need for staffing in other areas, such as support staff to manage inquiries or support calls?
Some incalculable values from inbound marketing, like consumer preferences, content intelligence, customer relationship strategies, and branding can be hard to tie to a number, but over time you will see that your ROI will become more clear to you as you generate leads, turn leads into customers, and see the result in the form of money gained (American dollars or British pounds!).
There are several ways to measure ROI. Reverse logistics will continue to grow in importance as regulations increase and the environment continues to come to the forefront as an ethical and practical issue. Content is king, so consider it, measure it, and go for it.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
When it comes to marketing we work with our clients to create and execute strategies that drive success and elevate their brand position within the industry. Unlike other firms, we align marketing programs with business objectives and, through a data driven approach, are able to deliver results with a targeted ROI. Our team is comprised of strategists, marketing professionals, writers, designers, and experts in social media. Together we leverage our experience to increase brand awareness, position our clients as thought leaders, drive meaningful engagement with prospects and customers, and help businesses grow.
by Fronetics | Jul 9, 2015 | Blog, Data/Analytics, Marketing, Social Media
In what seemed like a curious social experiment, KLM Royal Dutch Airline harnessed the popularity of social media and launched their “Meet and Seat” program in 2012. The service gives passengers the option to link their social media profiles to their boarding information during the ticket purchase process. Once a traveler’s profile is linked, they gain access to other social profiles of travelers that have also opted in to the service. Underling the concept is the notion that travelers will choose seatmates based on the profiles of users with similar business or leisure interests. While KLM reports that over 50,000 flyers have utilized the service since its inception – enough for KLM to deem the program successful – what’s discernable from KLM’s efforts is that social media has become a major player in today’s business world.
With a reported 8 out of 10 businesses using social media in the communication between their brand and their audiences, companies are spending more marketing dollars on social efforts with increasing regularity. But with its fairly recent introduction to the business world, many companies are struggling to determine whether their efforts, and their investments, are paying off. Fortunately, by focusing on a few key metrics, your company can start to understand which of your social efforts are adding value and, just as important, which ones are not.
Here are the 4 social metrics that matter:
Source Reports
The most common remark about measurement you’ll hear social media marketing experts say is that social media efforts shouldn’t be solely measured in likes and follows. It’s hard to connect the number of likes and follows to financial business metrics, so thinking about the success of your channels in different terms gives a more insightful report about how your social channels are performing. HubSpot recommends tracking the network source of your web traffic, leads, and customers to determine how your social platforms are performing.
Track: # of visits, leads, and customers for each of your social channels
Engagement and Amplification
“No man is an island,” wrote John Donne in his poem. His summation about the nature of humans is quite evident in social media. Indeed, one of the greatest benefits of social media is that it is by its very nature, social. For companies, social media exponentially expands the reach of its content by playing on the communal nature of these networks. If a company has 2,000 followers on Twitter, and each of them shared that company’s content with 200 of their followers, the amplification of its content has expanded to 200,000 users. Your business can leverage these immense networks by maintaining consistency in the quality and value of your content as this strategy will naturally inspire followers to share and repost your content. Track the types of content that drives the most amplification and identify trends in popular publishing times, then refine your efforts based on your analysis. Remember, as a business using social media, your end goal is action, not eyes. In other words, what’s important to your efforts is engagement. Pay close attention to how your followers are interacting with your content.
Track: # of Facebook Post Shares, # of Retweets, # of Twitter Mentions
Lead Generation
Put simply, lead generation activity lets you know whether your social content is generating leads and creating opportunities for your business. At the end of the day, your social efforts don’t matter if they aren’t playing a part in driving new business. Of particular value to your business is your conversion rate. Knowing how often content consumption results in a new lead will help you to build a more successful overall content strategy. Is your new infographic converting visitors to leads at a higher rate than your verbose Facebook posts? That might be a sign that your audience responds better to image-heavy content.
Track: # of form submissions, # of email subscribers, conversion rate
Return on Investment
If one of your company’s objectives for its social media participation is to drive growth, your company’s ROI calculation is one of the most important measurements of your social efforts. This measurement determines what impact your social content is having on customer acquisition and sales. Just as you would for all other marketing efforts, you need to know whether or not the investment you’re making in social media is producing a positive return for your business. To find your investment, start by calculating the total of your investment, your overhead factor, and your miscellaneous costs. To calculate your return, you’ll need to know your leads per month, your lead conversion rate, your average lifetime customer value, and average profit margin. Let’s take a look at how those factor into your ROI calculation in the example below.
To Calculate Investment
- Multiply the hours per month needed to create the content by the hourly rate of the employees used to create the content.
- Multiply the result by the overhead factor, taking into account rent, insurance, utilities, etc. (typically 50%)
- Add all other costs, such as design fees, hosting fees, subscriptions, software, etc. You may choose to allocate them to a specific piece of content or amortize them monthly and spread the costs evenly across each piece of content.
Calculation: At 40 hours/month at $40/hour to produce a corporate blog, multiplied by a 50% overhead factor. Add in $1k/month for design, $100/month for hosting, and $100/month for miscellaneous fees.
Total Investment in Monthly Blog = $3,600
To Calculate Return
Multiply your leads per month by your lead conversion rate, average lifetime customer value, and average profit margin.
Calculation: You collect 25 leads a month from your blog. At a 20% lead conversion rate, you’ll generate five new customers. Assume a $3,000 average lifetime customer value and a 30% average profit margin.
Total Monthly Blogging Return = $4,500
To Calculate Return on Investment
Subtract the investment from the return. Then, divide by the investment.
Calculation:
$4,500 – $3,600 = 900
900/3,600 = .25
ROI = 25%
Nearly 70% of communications professionals report dissatisfaction in how they’re measuring their social efforts. That’s understandable, social can be cumbersome to analyze. But looking at activity through the lens of your business objectives should really get to the heart of why your company participates in social media. In your work to distinguish your company from the thousands of others in the sea of social, seek to create rich and robust social experiences for your followers by connecting them with relevant and valuable content. Then measure that user activity and engagement to see how it is helping grow your business.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
Whether it is a wholesale food distributor seeking guidance on how to define and execute corporate strategy; a telematics firm needing high quality content on a consistent basis; a real estate firm looking for a marketing partner; or a supply chain firm in need of interim management, our clients rely on Fronetics to help them navigate through critical junctures, meet their toughest challenges, and take advantage of opportunities. We deliver high-impact results.
We advise and work with companies on their most critical issues and opportunities: strategy, marketing, organization, talent acquisition, performance management, and M&A support.
We have deep expertise and a proven track record in a broad range of industries including: supply chain, real estate, software, and logistics.
by Fronetics | Feb 23, 2015 | Blog, Content Marketing, Data/Analytics, Marketing, Strategy
Measuring blogging ROI is crucial to your overall marketing success.
Just as with outbound marketing activities, your company’s inbound marketing efforts should be given the same attention when it comes to Return on Investment (ROI) analysis. In fact, companies who measure inbound marketing ROI are more than 12 times more likely to generate better year-over-year returns. And with blogging being reported as the number one method for increasing website traffic, it should stand to reason that calculating ROI for your blogging efforts is crucial to your overall inbound marketing success.
Calculating ROI for blogging activities isn’t as straightforward as say, ROI from click-to-conversion, but its achievements can be measured in other ways. Consider employing a blend of these four categories to measure the effectiveness of your blogging efforts.
Audience and Content Reach
According to a 2013 HubSpot report, 85% of marketers reported increased web traffic within seven months of beginning inbound marketing activities. While it’s true that building a successful blog can take some time, there are things you can do (and measure) to speed its maturity. Encourage engagement and reach by crafting relevant and interesting content for your audience. This increases the likelihood your content is shared and commented on by your readers.
Track this: Beyond noting any increases in web traffic, track both your average cost per view and the number of comments and social shares your blog content receives.
Lead Generation
Tying revenue directly to publishing and distributing blog content can be difficult. Thinking about blogging activities within the context of your entire sales funnel can make it easier to determine effectiveness. As blog content is typically used to attract leads, encourage readers to subscribe to your blog or submit contact info to get higher-value content. Continued engagement nurtures leads and moves them further down the sales funnel.
Track this: The cost to get a lead. You can then determine the percentage of leads that move on to become qualified leads, the percentage of qualified leads that then become opportunities, and the percentage of opportunities that are ultimately won. At the end of the day, you’ll be able to calculate the revenue generated from leads that entered the funnel from blog content.
Intangibles
What are you gaining from networking with industry peers? Has your blog played a role in developing and nurturing professional relationships? Could you consider your blogging activities as part of your professional development? Blogging provides benefits outside of traditional marketing ROI measurements. Time spent researching, networking, writing, and engaging with others in your industry should certainly be considered when determining overall usefulness of blogging.
Track this: Sales cycle times. Staying current with industry trends and building a reputation as the go-to industry expert can be reflected in the type of customers and clients you are attracting. Are you attracting more high-quality leads and closing more ideal customers? Thank your blogging activity.
Cost of Customer Acquisition (CoCA)
By understanding how much it costs your business to acquire a new customer, you gain valuable insight into how much your business should be investing on blogging activities.
Track this: Calculate your (CoCA) by dividing your cost to blog by the number of visits the blog. For example, let’s say your company spent $500 on writing a blog post and 100 people visited your site. Your Cost of Visitor Acquisition will be $5 ($500 divided by 100). If 5% of those blog visitors convert into a lead then your Cost of Lead Acquisition (CoA) is $100 ($500 divided by 5 customers). If 10% of those leads actually buy something from you, your final Cost of Customer Acquisition is $50. Investing in one blog post will yield one new customer for every $50 you invest.
While it can feel a little unwieldy to measure ROI from blogging activities, keeping a strong focus on blogging goals and objectives will help to lend weight to metrics that will ultimately matter the most to you and your business. What measures does your company use to measure ROI for blogging?
by Fronetics | Feb 23, 2015 | Blog, Content Marketing, Data/Analytics, Marketing, Strategy
Measuring blogging ROI is crucial to your overall marketing success.
Just as with outbound marketing activities, your company’s inbound marketing efforts should be given the same attention when it comes to Return on Investment (ROI) analysis. In fact, companies who measure inbound marketing ROI are more than 12 times more likely to generate better year-over-year returns. And with blogging being reported as the number one method for increasing website traffic, it should stand to reason that calculating ROI for your blogging efforts is crucial to your overall inbound marketing success.
Calculating ROI for blogging activities isn’t as straightforward as say, ROI from click-to-conversion, but its achievements can be measured in other ways. Consider employing a blend of these four categories to measure the effectiveness of your blogging efforts.
Audience and Content Reach
According to a 2013 HubSpot report, 85% of marketers reported increased web traffic within seven months of beginning inbound marketing activities. While it’s true that building a successful blog can take some time, there are things you can do (and measure) to speed its maturity. Encourage engagement and reach by crafting relevant and interesting content for your audience. This increases the likelihood your content is shared and commented on by your readers.
Track this: Beyond noting any increases in web traffic, track both your average cost per view and the number of comments and social shares your blog content receives.
Lead Generation
Tying revenue directly to publishing and distributing blog content can be difficult. Thinking about blogging activities within the context of your entire sales funnel can make it easier to determine effectiveness. As blog content is typically used to attract leads, encourage readers to subscribe to your blog or submit contact info to get higher-value content. Continued engagement nurtures leads and moves them further down the sales funnel.
Track this: The cost to get a lead. You can then determine the percentage of leads that move on to become qualified leads, the percentage of qualified leads that then become opportunities, and the percentage of opportunities that are ultimately won. At the end of the day, you’ll be able to calculate the revenue generated from leads that entered the funnel from blog content.
Intangibles
What are you gaining from networking with industry peers? Has your blog played a role in developing and nurturing professional relationships? Could you consider your blogging activities as part of your professional development? Blogging provides benefits outside of traditional marketing ROI measurements. Time spent researching, networking, writing, and engaging with others in your industry should certainly be considered when determining overall usefulness of blogging.
Track this: Sales cycle times. Staying current with industry trends and building a reputation as the go-to industry expert can be reflected in the type of customers and clients you are attracting. Are you attracting more high-quality leads and closing more ideal customers? Thank your blogging activity.
Cost of Customer Acquisition (CoCA)
By understanding how much it costs your business to acquire a new customer, you gain valuable insight into how much your business should be investing on blogging activities.
Track this: Calculate your (CoCA) by dividing your cost to blog by the number of visits the blog. For example, let’s say your company spent $500 on writing a blog post and 100 people visited your site. Your Cost of Visitor Acquisition will be $5 ($500 divided by 100). If 5% of those blog visitors convert into a lead then your Cost of Lead Acquisition (CoA) is $100 ($500 divided by 5 customers). If 10% of those leads actually buy something from you, your final Cost of Customer Acquisition is $50. Investing in one blog post will yield one new customer for every $50 you invest.
While it can feel a little unwieldy to measure ROI from blogging activities, keeping a strong focus on blogging goals and objectives will help to lend weight to metrics that will ultimately matter the most to you and your business. What measures does your company use to measure ROI for blogging?
