If you’re not measuring it, how do you know if it’s working?
That’s as true for marketing as it is for anything else in business. If you’re not tracking results, you can’t know whether your efforts are paying off or if you should be devoting your attention somewhere else.
We’ll be conducting a survey later this year to gather information on marketing spending and ROI. We hope you’ll participate since it will give us the kind of data from which we can create benchmarks. You’ll be able to measure your results against those benchmarks.
But even without industry-wide data, you can benchmark against yourself. Begin by measuring. Here are a few examples of how you can do it. [level-members]
If you send a postcard to every household in your immediate area and you know that encompasses 5,000 households, you can use that as your baseline “reach.”
Use the postcard not simply to advertise great pricing or a new product, but to promote a particular offer the client must ask for. If 5 people ask for it, not so hot. If 500 ask, that’s a tremendously successful promotion
This can be a bit tricky. The easiest thing to do is to track all revenue generated by the promotion. But in reality, you should subtract the revenue that would have been generated anyway. This can get complicated and it’s fine to ignore. (At least until your shop becomes a Fortune 500-sized company …)
What did it cost you to send the postcard? What did it cost in terms of lowered pricing or other expenses related to the offer? Subtract that amount from the revenue it generated and you have your net revenue. Dive the net revenue by the expenses associated with the promotion.
There’s no magic number for success. Returns vary greatly depending on many factors, so the important thing to do is to track your results over time. You may think the big holiday promotion you do every December is great only to find that the Valentine’s Day offer you thought was hardly worth the effort is really a big money maker.
The more you track, the more you know. And the more you know, the more profit you’ll be able to generate. In other words, you’ll spend less to make more! [/level-members]