Measuring the ROI of Your Marketing Efforts
Every business lives and dies by its Profit & Loss (or, more accurately, because of its P&L). Whether you’re a Private Lender, or you run a hamster rodeo, your business has to take in more money than it sends out. But it’s more than just tracking capital ins and outs, you also have to justify the return on every dollar spent, including your marketing budget. Whether your marketing efforts consist of digital or traditional methods, you have to understand the return on investment (ROI). There are many ways to track the success of digital marketing campaigns which involve measuring clicks, impressions, website traffic and the like. Many marketers consider a form fill or a click to your website a conversion and use that metric to evaluate the performance of their campaigns, but they’re rarely able to tie revenue directly back to their marketing efforts. Where it gets tricky is bridging the gap between something digital like a social media campaign and the “real world”. It’s even more difficult to track “terrestrial” marketing efforts such as radio, TV, a magazine ad or a piece of printed collateral all the way to the bank, so to speak. How can you calculate your actual ROI on marketing spend without knowing how much revenue you’ve brought in as a result?
Digital Tracking Tools
Some of the more common methods of tracking conversions involve what I’ll call platform analytics. These can include such things as Facebook’s Insights reporting dashboard, Google Analytics or services like HubSpot which can give you great visibility on the audience size, interactions, clicks and website traffic. But the information you gain from these analytics platforms are still relatively limited in depth.
More savvy digital marketers have a few sharper arrows in their quivers to evaluate digital campaign performance. Tracking codes can provide a more granular view of the marketing funnel than broad analytics platforms. Those who have used Facebook or Google AdWords might be familiar with tracking pixels. These are like little voyeuristic snippets of code that gather information about the individuals interacting with your ads online. They can be used to measure online conversions on a specified page of your website or to serve retargeting ads to people who have visited your website, among other things. Another tool you can use is a UTM (Urchin Tracking Module) code. A UTM code is a section of text appended to the end of a URL which allows you to track visits to that URL, so you can evaluate the performance of campaigns associated with that specific URL.
The purpose here is not to provide a comprehensive discussion of digital tracking methods and every detail of how they operate. Just to provide some context to the “open end” of the marketing funnel in the modern digital landscape. The point is that, unless you run an eCommerce business, the internet has no way of knowing if any of these digital interactions resulted in revenue.
Tracking Leads from the “Real World”
In addition to taking advantage of all of the digital marketing luxuries we have access to these days, you may (and should) also be using traditional marketing methods like radio, television, and print publications that regularly touch your target audiences. But, tracking leads from these types of traditional sources through to the point of conversion is even more complicated than doing so for digital campaigns. The reality is, it’s not always feasible to ask every potential new client how they heard about you. And even if you did, they may have been exposed to your company in multiple different places (assuming you have an aggressive marketing strategy), so that input isn’t always the most useful. The solution, then, is to build multiple marketing funnels – both inside and outside of the digital sphere – using dedicated contact channels capable of capturing and tracking real world leads by assigning dedicated email addresses, URLs and even phone numbers. This isn’t a new idea, and it’s certainly not rocket science. But you can utilize these methods for segmenting leads from discrete campaigns.
Take a radio show, for example. It can be difficult to track a terrestrial or non-digital marketing campaign to the point of first contact. If a potential lead goes to your website or contacts you as a result of hearing your show, how do you know that’s where they came from? There are a few ways that you can funnel them into trackable communication channels based on a call-to-action given on your radio show (or TV show, podcast, magazine ad, billboard, etc.). The first method would be to set up an email address pinned to a specific campaign which is not public and is not used for any other purposes. Then if your call-to-action on the radio show is, “for more information about our services, visit radio@lendingcompany.com”, you know how to classify those leads.
The same idea applies to a dedicated URL. You can usually purchase domain names for relatively cheap. So, if you prefer to funnel them through your website and track it through Google Analytics, you could direct that URL to a standalone landing page and your call-to-action could be, “to learn more about us, visit lendingcompanyradio.com”. Finally, in conjunction with a dedicated URL and a purpose-built landing page, you can create a contact form specifically for that campaign. That way, you’ll know leads submitting that contact form came by way of a given campaign in addition to capturing their contact information. It’s also a good idea to include in those forms a “how did you hear about us?” dropdown option just to reinforce the lead source.
The Real Work Starts Now
Though many marketers would consider these events conversions, you can’t calculate your ROI without following them all the way to the point of sale which, in our case, is closing their loan. Whether your leads enter the marketing funnel from a digital or non-digital campaign, you now have to coordinate those efforts with your business development and/or sales teams. Whatever information you’ve gathered from the first contact from your leads should be compiled and organized into your CRM or even into a spreadsheet. If your campaign incorporated a dedicated email address or URL with a contact form, you will at least have captured a name and email address; you can backfill additional information as it becomes available. Then all of those leads should be tagged according to the campaign that pulled them into the marketing funnel.
From there, it’s simply a matter of following them through the sales process. When and if you’re able to convert them into a borrower, you will know exactly how much revenue resulted from that campaign, and you’ll be able to calculate your “real” ROI from that marketing spend. But that’s not the only benefit of this process. Not only can you evaluate the effectiveness of your marketing spend and allocate resources accordingly, you’ll also learn a lot about your sales process. If you’re unable to close a loan with some of the leads that have made it into the sales process, you should be able to see at which point they fell off. That can help you continually improve your sales operation and practices to produce better results in the future.
Never Settle for “Good Enough”
Marketing is not an exact science, but it’s not simply an art either; it’s always a combination of both. Your company’s processes and methodologies for attracting new leads should never be static. For any business initiative to be successful, you have to continually evolve. If you don’t get the results you would expect, you should evaluate why then refine it and try again. Marketing moves quickly these days, and there are always new tools at your disposal. It’s important to be both open to new ideas and critical of the results. If you are, you’ll always be able to improve the outcome. But tracking your business through the entire marketing funnel from cold lead to cold, hard cash is a good place to start.
