1. Define Your Strategy
It is impossible to measure your marketing efforts if you do not know your end goals. Begin your process by defining your strategy and what you want your marketing to achieve. Typically, your strategy will be defined by the stage in your marketing channel that you want to focus on. These stages include:
2. Determine Your KPIs
Key performance indicators, or KPIs, are the primary metric you will use to measure how well your marketing is working. However, in many cases, it is impossible to calculate exactly if your digital marketing efforts were the cause of increased sales. Typically, an increase in sales can be attributed to a combination of activities and marketing efforts.
KPIs allow businesses to measure the success of each channel. Each channel should focus on one to three KPIs to measure the success of its campaigns. For example, for a Facebook advertisement, your goal could be to increase brand awareness and use reach as the primary KPI.
3. Set Benchmarks
Benchmarks are the goals for your KPIs. By setting benchmarks, you can define what a ‘good’ number is in your metrics. It can be difficult for businesses to set benchmarks, but there are three areas to assess to help in this process.
- Look at industry averages
- Look at historical performance
- Analyze the resources available to you
4. Establish ROI
Your return on investment, or ROI, tells you how profitable your digital marketing is. To find your ROI, you need to know how much money you are putting into your marketing efforts and what you need to make from it for your strategy to be profitable. Money is not the only thing you need to take into account when calculating your ROI, but also the time and effort that goes into marketing.
5. Build a Measurement Program
After you have your KPIs, benchmarks, and ROI in place, the next thing you need to do is create a measurement program where you will track and report your metrics regularly. Typically, businesses track their digital metrics monthly.
Read more about Measuring Your Digital Marketing ROI at forbes.com