Measuring marketing ROI isn’t as easy as you might think. The difficulty is that money invested today delivers an unknown impact at an uncertain time in the future. Last month’s digital campaign could deliver results next month or next year. If revenue increased because the economy improved, can you attribute it to marketing success?
Here are metrics you should be tracking, that make a difference to the way you do business.
Customer Acquisition Cost (CAC)
The average cost of acquiring a new customer is important to your profitability, because it shows the difference between how much money you can make from a client and what it costs you to make it. In principle, it’s easy to calculate CAC by dividing your marketing expenses by the number of new clients you gained during the expenditure period. In reality, early marketing efforts that deliver results after the fact can cloud the situation, so it’s important to use a variety of scenarios to get a true picture.
Customer Lifetime Value (LTV) to CAC
Calculating the customer LTV is based on average order value, purchase frequency and estimated customer lifetime length. The ratio of CAC to LTV will provide insights into where your company should focus its ongoing marketing efforts—both for attracting new clients and retaining existing ones.
Lead Generation Sources
Deciding where to spend your marketing dollars is tough, but by tracking the sources of your leads it can help you make those choices. Sophisticated analytics will accurately reflect where the highest percentage of your leads are coming from, and by using methods such as the creation of custom URLs for your campaigns you’ll be able to determine which channels are sending you the most warm leads.
When you run a campaign that includes a specific way to measure results, make the most of it. Ideally, you should build tracking mechanisms such as unique purchase codes into every campaign, but sometimes it’s necessary to use a combination of metrics to develop a visual of your results. These could include:
- Multi-touch attribution – the standard belief is it takes at least seven touches to convert a cold lead into a sale.
- Multiple influencers – in the corporate healthcare environment purchasing departments typically include several people who contribute to decision-making.
If you’re able to track a campaign’s reach across at least three or four touches, you can create a reasonable picture of its effectiveness.
For more information on how to track vital marketing metrics for your healthcare organization, call Wax Custom Communications at 305.350.5700 or visit waxcom.com.