Most marketing departments don’t lack ideas or ambition — they lack a hefty budget. Following the old maxim “you’ve got to spend money to make money,” marketing departments that are able to get the capital they need can bring in more leads and increase the effectiveness of their marketing strategies. Convincing your boss of this fact is never easy, though. Marketing dollars don’t always generate quick results that executives want to see before they justify extra expenditures. In order to prove that investing in marketing is beneficial for the future of the company, you’re going to have to prove how important your marketing results were for your organization’s bottom line in the past.
Your job as a marketer is to sell your marketing department’s value to your boss. The most common approach is to expound upon the benefits of your marketing efforts, but this type of explanation isn’t always convincing to numbers-oriented executives. Instead, you should focus on showing how spends in the past contributed to events like sales lift, sales-qualified lead generation and market penetration to your target audience. So, your main challenge is effectively measuring ROI and presenting it to your supervisors compellingly.
Digging into the right data isn’t exactly easy, but when you take your time to find valuable insights, it can yield revelations and persuasive metrics. Forbes recommends examining five online metrics in particular to find examples of past success:
1. Ratio of New Sessions to Recurring Sessions: Google Analytics can reveal how many of your site visitors are new, and how many are repeat visitors. Both are valuable, especially if they each grew reliably over during a certain campaign.
2. Customer Retention Rate: Measuring the amount of customers that have returned to your business to make purchases or use your services is a good indicator of how effective your marketing efforts have been, especially when it comes to brand loyalty.
3. Cost Per Lead: This metric is calculated by dividing your spend by leads generated. Inbound marketing can create far lower costs per lead compared to heavy-spend outbound techniques — use this metric to show how much money you saved your organization.
4. Online Engagement: Likes, shares and mentions don’t exactly create revenue, but you can use increased engagement to demonstrate the effectiveness of your marketing.
5. Total Conversions: The ultimate goal of marketing is to convert leads to the next stage of the sales funnel — show your boss how many leads you converted into customers.
If you’re able to present instances where spend improved any of these marketing results, you’re on the right path to getting the increased budget your department needs.
Showing your boss ROI results is the first step in justifying a bigger budget — forecasting how marketing spend can influence your organization’s future bottom line is just as important. A video by the American Marketing Association gives a few steps for coming up with ways to anticipate future marketing success:
Combining prospective future gains with solid past successes is the right mix to convince your boss that if you have more money to work with, you’ll get even more positive marketing results for your company’s overall revenue.
Executives — especially CFOs — must be able to understand how marketing processes contribute to your organization’s overall bottom line before they’ll understand why they should increase your budget. Examining key metrics can demonstrate how marketing has been effective in the past, and what you need to create future gains. Plus, these measurements can dictate a strategy for improving branding, competing with peers, keeping up with leading-edge trends and ultimately generating favorable ROI. With the right insights, you’ll be on your way to working with a budget that will boost your marketing results and satisfy upper management.