All business owners want to know if their marketing efforts really work–and more importantly, which ones work best.

But for most small businesses, separating marketing from sales, and one marketing activity from another, is like unraveling a Gordian knot. You just can’t get the information untangled!

So what can you do?

One option is to look at every marketing activity, determine a desired and measurable goal, and then measure response. For example:

  • The goal of an email newsletter might be to drive web traffic, so you can measure the amount of traffic before the newsletter is sent, and compare it with the traffic after the email is sent.
  • For SEO, you can measure traffic coming to your website from search engines, and you can use Google Analytics to track the data.
  • For social media, you can measure the number of Facebook likes, Twitter followers, retweets, etc. And you can use tools like Social Mention to track the results. You can also look at Google Analytics to see the trends in traffic being driven to your website from social sites.
  • For direct mail, you can count the number of people who respond, or the increase in appointments your sales reps are able to generate by following up.

In staffing, however, what matters most is gross margin. And that’s the measure we recommend clients use. The goal of marketing is really to make your sales team more productive. Your marketing may generate direct sales leads, or it may simply open the door for a sales call. In fact, one of our most successful recent campaigns lead to a 100 percent improvement in the ratio of sales calls to appointments, which in turn led to a significant increase in close percentage, and a reduction of the sales cycle, from many months to less than four weeks.

At Haley Marketing, we tell our clients to measure marketing based on gross margin dollars produced from new clients closed, as a result of the combined effort of their marketing campaign and sales follow-up efforts.

Rather than segmenting marketing and sales, it’s far easier to measure the combination and determine:

  • Did sales productivity improve? You can look at metrics like the ratio of calls to appointments, the percentage of prospects closed, and the duration of the sales cycle.
  • How much gross margin was produced? Since many new clients will start small and then increase their volume, we recommend measuring gross margin over a period of one year from the end of the campaign.

The bottom line is that if you really want to get serious about measuring your marketing efforts, you must clearly define what you want to accomplish, set a minimum target for ROI and then measure the gross margin to ensure your target is being met.

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