The end of another year is fast approaching. For most, that means holiday shopping, parties, and some reflection on the events of Earth’s most recent trip around the sun. For business owners like you, the end of the year brings another task: evaluating your marketing efforts.
It’s not as fun as popping champagne and singing “Auld Lang Syne”, but it’s important—you worked hard on your marketing campaigns, and you want to ensure that your efforts paid off.
While measuring the profitability of your marketing is more straightforward than measuring the profitability of your brand, it comes with its own challenges. But evaluating your marketing efforts at the end of the year will help you develop your marketing budget and strategy in the new year, and in the years to come.
1. Sales Numbers
The quickest, easiest, and most obvious method for evaluating your marketing is to look at your sales numbers—how much money your business made over the past year. Compare this figure to your total sales from years past. If there was an overall increase, it’s a good indicator that your marketing has been heading in the right direction.
You’ll also want to evaluate your sales numbers as they relate to specific marketing campaigns. Say you’re a restaurateur known for your dinner service, but you began serving Sunday brunch two years ago. The initial sales from brunch were relatively low, so this year, you invested in a robust marketing campaign promoting your brunch service. If your brunch sales after the campaign launch were significantly higher than your brunch sales before, you can feel confident that your marketing efforts were worthwhile.
As you evaluate your numbers, remember to account for outside factors that may have bumped up your sales—for instance, if you raised the prices on your menu or opened a new restaurant location. That being said, higher sales numbers are a quick and simple way to gauge the success of your marketing strategy.
2. Return on Investment (ROI)
As any economics class will teach you, higher sales don’t necessarily equate to higher profits. If your business made thousands of dollars off a service, but spent thousands of dollars establishing and promoting that service in the first place, you’re not pushing the needle forward. To evaluate the success of a particular marketing effort, you’ll need to compare its outcome to its costs.
This comparison is known as return on investment, or ROI. There are a few different formulas for calculating the ROI of a marketing campaign, but the simplest is:
(Sales Growth - Marketing Cost) / Marketing Cost = ROI
You can use this formula to calculate the ROI of each of your specific marketing campaigns and activities, such as the launch of a new service, a pay-per-click digital advertisement, an updated lead magnet, or even your overall social media strategy.
Keep in mind that ROI isn’t necessarily about sales. It’s important for your business to develop campaigns that cover every level of the marketing funnel. Some of your marketing campaigns might aim to expand your audience by building up your email list or to engage that audience through a strong social media presence.
When it comes time to evaluate the ROI of marketing activities that weren’t directly geared towards sales, consider whether you met the goals of that campaign and whether the time and energy spent on meeting those goals outweighed the benefits. If hiring a social media strategist allowed you to optimize your brand on Instagram and gain thousands of followers, you can feel confident that the money and resources you put towards the new hire were well spent.
3. Consumer Response
Of course you want your business to turn a profit, but you also want to ensure that your brand is impacting your audience in a positive way. And the surest way to figure that out is to ask them.
You can gauge your clients’ thoughts on your marketing efforts in a number of ways. Surveys, both online and in-person, are a simple yet effective method of determining how your clients feel about your brand and which of your marketing activities have had the greatest impact on them. An easy way to determine this is by asking your newest clients how they heard about your brand, and then tracking their responses. You can also evaluate the reach of your marketing by asking your clients where they live—this is especially relevant for digital brands with the potential to serve a global audience.
In addition to surveys, be sure to check your audience’s reviews and comments on your social media accounts. Positive or negative, it’s all information that can help you determine where you’re best serving your clients—and where you’re falling short.
4. Industry Context
No brand exists within a vacuum. No matter how small your business is, it’s an important part of your larger industry. So, to evaluate your business’s marketing over the last year, you’ll need to frame it within the context of your industry.
If there were major shifts—positive or negative—in your sales numbers or ROI, consider what recent changes may have occurred in your industry to contribute to those shifts. Practically every industry experienced major changes during the COVID-19 pandemic, for instance. Restaurants saw a spike in takeout sales, while corporate industries may have seen larger profits after cutting costs associated with physical office space (rent, electrical bills, and more).
There’s another unlikely, yet effective, place to see whether your marketing efforts were successful: your competitors. You’ve heard that imitation is the highest form of flattery, and that goes for marketing, too. If your main competitors rolled out marketing campaigns that looked suspiciously familiar to your own, it’s a good sign that your efforts made an impact on your industry.
Look Back to Look Forward
You can’t move forward in your branding and marketing without a clear sense of where you’ve been. Evaluating your marketing performance at the end of the year might feel intimidating, but it’s crucial to developing your brand’s budget and strategy in the new year. We hope the methods we’ve shared above help to position you well for success next year!
For a detailed analysis of how well your branding and marketing efforts have paid off, book a Brand Audit Discovery Call with Miss Details today.
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