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From Omnichannel CPA to ROI and Lifetime Value - use the right metrics to ensure your campaign is trending in the right direction.
Building a strategy for a marketing campaign to grow your business is crucial. Equally important is ensuring you have the right steps implemented to track the campaign's performance. This allows you to understand the real impact it's having and where to optimize throughout the campaign. Let's explore the critical components of a successful campaign strategy along with the metrics you need to measure success.
Before launching your campaign, clearly document your goals using the 4 Ps of marketing:
Product: What exactly are you selling? Define your product or service offering along with your target audience.
Price: What is the price of your product or service? You can determine this by understanding the pricing sensitivity of your target audience as well as researching your competitors pricing strategy.
Place: Where will you sell your product or service? List the distribution channels you'll use (e.g., digitally, in-store, through partners, etc).
Promotion: How will you market the product? What channels or campaigns will you use? Include any specific offers, discounts, or bonuses that will appeal to your target audience.
People: Who are the team members or suppliers involved in the marketing creation and distribution process?
Process: What is the clear process of how a lead will convert into a sale? Document who’s involved, when and how.
Physical Evidence: How will your prospects experience your brand in-person (i.e. office meetings, product packaging, customer testimonials, branded collateral)?
Once you have these outlined, map out your marketing budget based on the channels and programs outlined in the “Promotion” area. Allocate funds to each channel based on expected ROI.
Target goals should be specific, measurable, achievable, relevant, and time-bound (SMART).
Some common marketing campaign goals are:
Awareness: Drive traffic, followers, impressions.
Example benchmarks: 5,000 new website visitors, 2,000 social media followers, 1 million impressions.
Acquisition: Focus on sales, leads, or sign-ups.
Example: 100 new leads, 50 purchases, 10% conversion rate.
Retention: Enhance customer loyalty and growth.
Example: 20% increase in repeat purchases, 10% higher customer lifetime value (LTV).
Partnerships: Build relationships and collaborations.
Example: 3 new partnerships, 20% increase in co-marketing activities.
Fundraising: Raise a specific amount.
Example: $20,000 by the campaign’s end.
Pipeline Growth: Increase potential leads or opportunities.
Example: 10% growth in the sales pipeline.
Cost Per Acquisition (CPA): Reduce overall CPA across all channels.
Example: Lower CPA by 15% across paid channels.
Hard metrics are directly tied to revenue or the end goal, while soft metrics assess the health of a channel. Use previous channel performance to determine a benchmark. If you don’t have benchmarks, you can use specific industry reports to gauge how you’re trending - keep in mind that every business is different.
Here's an example of hard and soft metrics by channel:
Tracking performance is essential to evaluating your campaign’s effectiveness. Create dashboards with key metrics for each channel, and ensure you have a system in place to actively monitor and share performance data with your team. A communication plan is important—schedule regular updates with stakeholders to keep them informed on progress.
After the first 2 weeks of your campaign running, it’s time to evaluate performance. Success indicators include:
Sales or Leads Growth: Are your sales or leads trending upward at a lower CPA than previous campaigns? For example, a CPA reduction of 10% while achieving a 20% increase in conversions signals success.
Higher Response Rate: Are customers engaging with your content at a higher rate than before? A response rate increase of 15% can indicate higher relevance or effectiveness.
Increased Awareness: Are your awareness metrics, like impressions or traffic, exceeding previous benchmarks? For instance, a 30% boost in impressions could reflect improved brand visibility.
If these trends aren’t occurring, it's time to dig into each channel’s performance. Continuous iteration is key—use A/B testing and creative adjustments to optimize your campaigns.
Depending on the budget, weekly or bi-weekly performance reviews will ensure you’re optimizing based on data.
Campaign measurement doesn’t stop when the campaign ends. A critical part of understanding your overall marketing success is analyzing the post-campaign impact, which can often yield insights that were not apparent during the active phase. This ongoing measurement is essential, especially if you operate in industries with longer sales cycles or delayed customer actions.
Here’s a structured approach to post-campaign measurement:
Key Metrics to Monitor: Immediate sales lift, customer inquiries, leads, or any short-term actions that can be attributed to the campaign.
Common Findings: Most campaigns will see an initial spike in engagement and conversions that may taper off. This phase is crucial for understanding immediate wins and quick ROI.
Example: A paid social campaign may generate a surge in website visits within the first 30 days, allowing you to calculate the cost per visit and conversion rate quickly.
Key Metrics to Monitor: Engagement metrics that indicate the campaign's lasting impact, such as returning customers, subscription renewals, or ongoing content shares.
Common Findings: By the 60-day mark, customer retention and repeat business often begin to show patterns. You can assess whether your campaign not only attracted new customers but also helped retain them.
Example: An email campaign driving subscription sign-ups can be evaluated for churn rate after 60 days to determine if subscribers are staying engaged.
Key Metrics to Monitor: Long-term metrics like customer lifetime value (LTV), ongoing referral traffic, and pipeline velocity for B2B companies.
Common Findings: At this stage, you can measure the lasting effects of the campaign on overall business growth, including any delayed conversions or referrals. This data helps establish the campaign’s contribution to long-term profitability.
Example: A B2B campaign designed to nurture leads may result in closed deals 90+ days post-campaign, offering insights into the true cost of acquiring a customer and the pipeline's health.
Post-campaign measurement provides a clearer picture of your campaign’s ROI. Consider both direct and indirect results:
Direct ROI: The immediate revenue generated directly from the campaign. For example, if a campaign costs $10,000 and generates $30,000 in direct sales, the ROI would be 200%.
Indirect ROI: Additional revenue attributed to the campaign through extended actions like word-of-mouth referrals, customer lifetime value (LTV), and improved brand sentiment. For instance, a campaign that didn't generate immediate sales but significantly increased website traffic or improved brand sentiment may still yield significant future revenue.
ROI calculations should include:
Revenue (or value) generated
Total costs (including hidden costs like team time, tools, and ad spend)
Time horizon for revenue attribution (immediate vs. long-term)
Calculate LTV for Acquired Customers: Post-campaign, it’s essential to measure the customer lifetime value (LTV) of customers acquired through the campaign. This metric helps you understand how much revenue you can expect from these customers over time.
Formula: LTV = (Average Purchase Value) x (Number of Purchases per Year) x (Customer Lifespan in Years)
Example: If the campaign brought in 100 new customers, and their average LTV is $1,000, the campaign's long-term impact would be $100,000 in value, even if the initial sales were only $10,000.
Compare to Acquisition Costs: Once you know the LTV of customers acquired through the campaign, compare it to your customer acquisition cost (CAC). This ratio (LTV) should ideally be 3:1 or higher, indicating that your campaign has successfully acquired profitable customers.
Calculate omnichannel CPA by adding up the total cost of all channels and divide by the total number of acquisitions from all channels.
Assess how the CPA differs from other campaigns you’ve run.
Segment Analysis: Post-campaign, segment your audience to see which groups performed best. Did a specific demographic convert more effectively? Did one marketing channel outperform others? This data will help fine-tune future campaigns by doubling down on what worked and improving areas that underperformed.
Customer Feedback: Use surveys and social listening tools to gather qualitative feedback from customers who engaged with the campaign. This feedback offers insights into customer satisfaction, unmet needs, and potential areas for improvement.
Performance Benchmarking: Use the data from your post-campaign analysis to set benchmarks for future campaigns. For example, if your 90-day ROI was 150%, set this as a baseline for similar campaigns. By continuously measuring and comparing post-campaign results, you’ll create a cycle of improvement that drives more effective marketing efforts.
Long-Term Trends: Analyze long-term trends by comparing multiple campaigns. This will help you identify seasonality, customer preferences, and the most effective channels, allowing you to allocate future budgets more effectively.
Summarize Reporting: Create a comprehensive report summarizing your findings, including the immediate and long-term results of the campaign, insights on ROI, LTV, and any unexpected outcomes.
Share actionable Recommendations: For future campaigns based on your data. This could include optimizing underperforming channels, reallocating budget, or refining messaging strategies.
Stakeholder Communication: Maintain a regular cadence for sharing insights with stakeholders, whether through quarterly business reviews or dedicated post-campaign analysis meetings. This keeps your team aligned and ensures everyone understands the long-term impact of your marketing efforts.
Measuring the success of a marketing campaign is a dynamic, ongoing process that requires careful planning and consistent analysis. By setting clear goals, using both hard and soft metrics, and committing to continuous optimization, your marketing campaigns will not only meet benchmarks but exceed them. Ultimately, this level of attention will drive higher ROI, longer customer lifetime value, and stronger business growth in the long run.
References:
Benchmark numbers for marketing campaigns often vary depending on industry, channel, and region. However, reliable sources frequently provide these benchmarks through large-scale studies or surveys. Here are some common sources: