So for some reason, lately more so than ever before, a question has been bothering me. Many Small & Medium Enterprises (SME’s) in various sectors and industries (Engineering or Manufacturing for example) have in the past and even still now struggled to get to grips with Marketing as a core aspect of the business, often seeing it as a necessary expenditure but one in which funds are endlessly pumped in the hopes the bottom line is impacted.
Many larger or modern companies have now implemented some kind of metrics related to Return-On-Investment (ROI), not just for monitoring marketing but the entire business. As I see it, no business can truly measure the results or overall success of its Marketing activity unless it has a clear grasp of two things; Where the Marketing money is going and Where the orders are coming from.
- What is a CRM?
A CRM is a system used to perform a great many business functions and to bind them together. It’s used to manage the entire relationship between a company and its customers, recording all the communications and transactions between them and gradually building up a profile.
- Why do we need a CRM?
A CRM system enables marketers to profile customers and therefore directly target them with appropriate marketing at the right time. Further to this it enables business managers to monitor where orders are coming from and how it relates to marketing activity.
- How can Marketers measure ROI without a CRM?
With a correctly integrated CRM system, planned marketing activity, whether conventional or digital, can be directly tied to sales and a return on the marketing investment can be calculated. I.e. spent x amount on campaign A. Campaign A led to y amount in sales. Without a CRM system this has to be done manually, by asking sales to report back on the lead sources of new orders, a tall order at the bet of times. With a CRM the lead source is either determined automatically by the system or is a required field for manual entry on order entry, still subject to human error of course.
At the end of the day it boils down to what you define as a “return” on investment because if your goal is to increase exposure and increase traffic to your website then this may be achievable and measurable without any connection to back office systems. The truth is, regardless of the business KPI all business’ are about the bottom line and getting orders but sometimes the marketing campaigns goal is to build an audience for future campaigns when you can then convert them to customers.
Ways to judge the success of a campaign:
- Align increased product sales with a campaign over a fixed time period
- An increase in website visitors
- More enquiries via phone calls/emails/web form submissions
- Click-throughs from email marketing campaigns
- Increased following and engagement in social media
Some of these will require manual input from sales to determine if more orders have been placed and for which products (obviously no good if its not for the campaigns targeted products etc.). Others can be automatically assessed such as web metrics, social media and email marketing campaign results which are usually self sufficient from back office systems.
To really measure the ROI of any marketing campaign we’d need to calculate the average value of a website visitor/email recipient/customer/order and attach that value to the metrics above, but thats a whole other story for another day…