Which marketing solutions are working for you?

On Friday, I discussed the importance of spreading your marketing dollars into several different projects.  By doing this, you can quickly move your marketing dollars from projects that aren’t working to those that are improving your profitability.  This is a good approach, but it will not work unless you can accurately track the results from each project.

Unfortunately, financial results from marketing programs can occur over several months or years.  Since we want to quickly stop projects that are not contributing to our business’ success, we need some additional measures to help us make accurate decisions quickly.  Any successful marketing program will contribute financial results in three key areas.

• How many leads does each program generate?  You should have a way to learn how each potential customer found you.  Did they find you through a Google AdWords campaign, or did they sign up for your newsletter?  If you are not able to identify how your leads are initially learning about you, then you have no idea which marketing program(s) is(are) successful.
• How many leads are you converting into paying customers?  Leads without conversions are like losing lottery tickets.  There was some promise with the lead, but it did not turn into a paying customer or client.  It is possible that your lead conversion percentage may be too high, which means you may be undercharging for your product or service.
• What is the revenue and operating margin for each marketing project or channel?  It is completely possible to lose money on customers if they demand too many discounts or “sweetheart deals” to buy from you.  If a marketing project is attracting customers that will not buy from you without you offering major discounts or concessions, then you will have low revenue or margins from that project and should discontinue it.

When you understand how each of your marketing projects contributes to your profitability, you will have the information needed to decide which programs should continue and which programs should stop.