Since the beginning, marketing professionals have faced the challenge of proving their ROI. Traditional marketing methods like TV, radio, billboards and print constantly had to justify their budgets with hard to measure metrics like reach, brand awareness and campaign impact.
Fortunately, inbound marketing doesn’t suffer from the same quandary as our offline counterparts and marketing departments around the world can finally quantify our bottom line impact on the business. Rejoice!
However, now we face a new challenge. There are literally hundreds of ways to track and analyze your inbound marketing efforts ranging from things like SEO and keyword rankings to engagement metrics like social followers and blog subscribers. The problem with these vanity metrics is that it’s difficult to connect them to business metrics that actually drive your company’s growth. For example, how do you show your CEO or investors that those 144 LinkedIn shares on your last article translate into actual new revenue for the company?
The solution is to separate your inbound marketing “activity” from your inbound marketing “results”. In other words, we need to develop an outcome-oriented philosophy.
It’s critically important that we get this right. If we start tracking the wrong metrics, we’ll continue to pump time, energy and resources into marketing activity that generates something, but doesn’t necessarily impact revenue. That’s why it’s essential that we push ourselves to create financially-driven metrics that illustrate exactly how inbound marketing helps our company create more top-line revenue and higher profits than our competitors.
Here’s how to measure the real impact of your B2B inbound marketing strategy:
1. Track top of the funnel growth in organic website traffic and new lead generation
Top of the funnel means increasing the reach and engagement of your target market. If 100 relevant users visited your website last month and this month you attracted 1000 visitors, you have increased your top of the funnel engagement by 10X. Organic website traffic refers to the people who find your website or landing page in ways other than paid promotion or direct email campaigns. These channels can include search engine traffic, social media referrals or traffic from other websites that have referenced your company or content.
Now, we need to track how much of our traffic converts into leads, then calculating how many of those leads convert into sales. These are the first metrics we can use to demonstrate that our blog articles, social media activity and copywriting are actually impacting our revenues. Be sure to track your trending results in terms of month-over-month growth, not just the absolute value at a static moment in time. For example, if your organic traffic is increasing 4X per month, but new leads or sales are only increasing 1.5X, you may be targeting the wrong audience or have a flaw in your landing page optimization. This will keep you on track towards a successful inbound marketing strategy.
2. Measure social engagement, not reach
The secret is out on content marketing and, as a result, the internet is a very noisy place. Just because you have 100k followers and Twitter or Facebook (that’s your reach btw), it doesn’t mean they are paying any attention to you (that’s called engagement). Social engagement has become even more critical as the major platforms (Facebook, LinkedIn, Pinterest, Twitter, etc) are constantly striving to keep their users on their site longer and Google is using social as an indicator of website importance in SEO rankings.
While likes, shares, comments and follows may sound like vanity metrics (because they are), it doesn’t mean they’re not important. These social metrics help us identify what our audience finds interesting and what they’re ignoring. This is also where we can steal our competitors’ KPIs to get new ideas for engaging content that our audience to which our audience is most likely to respond. (shameless plug: Kompyte does this for you automatically and breaks down your competitors’ metrics in terms of both engagement and relative impact.)
3. Break down lead generation by source
Thanks to Google Analytics, we can now see exactly where our traffic is coming from and which initiatives are driving the most leads. First, identify which sources are driving the most organic traffic to your website or landing pages. Is it coming from social media, referrals or search engines? Then, look at which types of content are generating the most leads. Are they your blog articles, ebooks, case studies, etc? Which topics are your target audience engaging with and responding to with clicks and new signups? From this data, you can determine which inbound marketing initiatives are driving the most revenue and continue to push more resources in those areas.
4. Identify what percentage of leads came from inbound activity
One of the trickiest moments when tracking your B2B inbound marketing impact happens when you realize that your prospects aren’t always converting on their first visit, or second, or third, or tenth. With inbound marketing, not only are you attempting to add value by solving the pain points of your target audience, but you’re also building a relationship. A positive long-term relationship founded on trust and your willingness to provide valuable, actionable expertise before asking for their business.
Well that’s all rosy and wonderful, but it’s not particularly helpful when your CEO is demanding double-digit revenue growth and you’re spouting off some bullsh*t about relationship building.
The solution lies in tracking the original source of your leads. When you identify the piece of content or social media activity that first attracted a new lead, you can track that user through the entire sales funnel and better understand how new customers are first discovering and engaging with your brand.
This is also an area where marketing and sales begin to merge (ie: social selling). By understanding your sales funnel, both marketing and sales will be better equipped to develop target personas, create personalized offers and craft the content necessary to drive more revenue.
5. Forecast future revenues
Want to really get on management’s good side? Tell them how much money you’re going to make them next month. The hard truth is that the C-level executives in your company don’t care about vanity marketing metrics and they don’t even really pay attention to the amount of new leads coming in. They care about their sales pipeline and the revenue for next month/next quarter/next year. As you get better at tracking your inbound marketing impact, return on investment and data collection methods, you’re going to be able to accurately predict the future revenues driven by your contributions. Furthermore, you’ll have more ammunition for your budget request because you can accurately cite the ROI for each marketing initiative you propose. While forecasting the future revenues of your inbound marketing strategy isn’t easy, it’s likely the single-most important metric for the management team.
Remember: the golden rule of inbound is progress, not perfection. We must constantly measure, analyze and improve our inbound marketing efforts. One of the easiest ways to accelerate your improvement is by tracking all of your competitors’ inbound marketing results and adding their data to your own. As a wise man once said, “Only a fool learns from his own mistakes, a wise man learns from the mistakes of others.”