Can You Prove Marketing ROI?
It’s the middle of football season and while I am a lifetime Eagles fan, I’m still a little fuzzy on football metrics. I’ve heard commentators discuss the NFL’s Quarterback Rating for years. Let’s take Carson Wentz’s rating as an example. This year his quarterback rating was 109.6 through the first six games he played while the team went 3-3. Last year, Wentz’s rating was lower (101.9) and the Eagles won the Super Bowl!
What do these metrics really mean? Does any single metric in isolation tell me how successful one player is at any given time? How about the team as a whole? How are the sum of individual players’ performance stats evaluated as a whole team? After all, it is a team sport.
All of this got me thinking about B2B marketing metrics and the utilization of benchmark data. Many B2B companies are very fuzzy on marketing metrics in a similar way that I am on football metrics. They don’t seem to see the point, aren’t sure how they are calculated, and can’t establish an ROI based on their current data analysis. What isn’t measured can’t be managed or evaluated for performance. If you can’t evaluate your performance, then it is difficult to know what performs better or how to improve. And it’s difficult-if not impossible-to tell the C-Suite or management what key metrics mean without a meaningful standard to compare to. Understanding how to find and apply benchmark data will help clear up that fuzziness.
A benchmark is any number that can be used for comparison to assess the performance of one initiative over another. It is essentially a measuring stick. If you want to know how your marketing is performing, you need a benchmark.
Let’s take email click-through rate as an example. Is a 2% click-through rate good or bad? That depends on the size of the email list, the content, the audience, and the marketing message. For a large, industry-wide B2B email campaign, a 2% click-through rate can be exceptionally good.
So, do the NFL Commentators have benchmarks to compare Carson Wentz’s performance to? Of course. In his rookie year, two years ago, Carson’s QB Rating was 79.3. Which, I’m guessing, was not a great rating. The team record that year was 7-9. This type of benchmark is called an internal benchmark.
Measuring Marketing ROI
Benchmarks are critical for marketing metrics because companies often look at their numbers and are unable to tell a compelling story. Benchmark data is a starting point when analyzing your performance and building a more complete story of your marketing ROI. The key is finding the benchmarks that have the right context to tell your story.
There are two categories of benchmark data-External and Internal. External benchmarks are usually averages based on which industry category your business falls into, which tend to be broad categorizations. External benchmarks don’t take into account your company’s historical performance, brand equity, or audience personality. Which means that external benchmarks are not always the most useful, especially for a small business that might be just getting started.
However, external benchmarks can be useful as a starting point for comparing your marketing to the rest of your industry and where you should aim to be in the future. You can pull your industry’s benchmark email marketing open rate as a way to see where you stand. But, like a tequila shot at an Eagles tailgate, you have to take benchmark data with a grain of salt. Nevertheless, it’s worth a look. You can find some interesting benchmark industry comparison data at databox.com.
The other benchmark category, internal benchmarks, are slightly different. Internal benchmarks are created from your historical data. For example, after running a few email marketing campaigns, you can get a benchmark open rate. Using this internal benchmark will help measure each email after that and give your team a better understanding of the email campaign’s performance.
Continuing the email example, you can get more specific about your internal benchmarks by drilling down on the type of campaign, the actual email send time, email list size, etc. By getting more specific with your internal benchmarks, you will be able to create a more accurate story with your marketing metrics. A/B testing is also a powerful tool to confirm the reliability of your benchmarks or prove the unreliability of your audience.
At first you might find it difficult to isolate the specific factors that lead to success over your established benchmarks. But you have to start somewhere! Anywhere! And after a short time, you will realize that you are creating new benchmarks to use as your business grows and evolves.
As you go along, don’t get caught up in how overwhelming it can be. Choose a metric you want to focus on improving and get both internal and external benchmarks and start analyzing. Let the numbers tell a story and interpret that story in as much detail as you can.
You won’t always be accurate in your interpretation, but you can always adjust your benchmarks to help make your evaluation effective and meaningful. Most importantly, don’t stop monitoring the performance of your marketing initiatives over time against the benchmarks you’ve set. It will pay off with marketing ROI you can demonstrate to your C-Suite or management.
ABOUT THE AUTHOR
Kate Morgner is the Marketing Director at The Alias Group, a company focused on growing businesses through outsourced inside sales and marketing. Alias delivers efficient marketing strategy and execution campaigns to B2B companies seeking to create new opportunities. Kate leads the marketing team in strategic marketing planning, branding, and targeted messaging tailored to client needs. Outside of time spent marketing, her passion is her growing family. Spending time trying to squeeze as much quality time as possible out of every moment, including backyard shenanigans, beach trips, and hiking.