Do you know if the sales and marketing efforts inside your MSP and technology business are effective? If you’re like 45% of other small businesses, you have no idea, and that’s kind of scary.
It also means you’re probably:
- Wasting money on bad marketing.
- Unsure of your return on investment because you didn’t go all-in with a particular marketing tactic and instead pulled back when you became unsure.
- Unfamiliar with the strengths, weaknesses, opportunities, and threats (S.W.O.T.) to your business.
This is why you need to learn what’s working and what’s not in regard to your marketing decisions. Analytics, marketing metrics, and other key performance indicators (KPIs) provide the information you need, so you can make informed decisions.
But what exactly should you measure? Which metrics are important to track, and which ones are simply sucking your time and energy away?
Set Clear Goals
First things first. You need a goal.
Marketing tactics are always changing, just like the latest Google or Facebook algorithms. What your company measures today may not be the most effective thing for another business to measure.
Start by determining the questions you want answered with the data you collect:
- Do you need to know how many sales came in from your last promotion?
- What marketing activities should you be measuring and even make sense to review?
- Do you need to determine your audience demographics (persona) to better narrow your marketing approach?
- Or, do you simply need to justify to your financial department that direct mail is an effective marketing strategy?
Whatever your reasons, set goals for your marketing that are realistic, easily measured, and actually indicate business growth. In other words, goals that don’t just look good on paper.
For example, an increase in web traffic may seem like a good goal, but does it translate to increased sales? You need to be able to tell if that uptick in traffic resulted in any additional revenue.
The Big Three
Imagine for a minute that you decided to pitch your marketing idea to the sharks on ABC’s hit show, Shark Tank. These are the top three questions they’d expect you to have an answer for:
1. What is your sales revenue?
To know how effective your marketing is, you must understand your sales revenue. After all, no one wants to spend money on something that isn’t generating money in return. Track your total sales for the year and then subtract it from the total revenue you acquired from your inbound or outbound marketing tactics. This will help you determine if your methods are on track or if you’re wasting your time.
2. What is your cost per lead, or customer acquisition cost?
To determine how much it costs to acquire a new customer, you must calculate things like labor, technology and software, and general overhead expenses for your inbound practices, as well as things such as your advertising costs, distribution, and sales and marketing labor expenses for your outbound marketing. Then, divide it by the number of customers you acquired through your marketing efforts.
3. What is the long-term potential, or customer lifetime value (CLV)?
A shark isn’t going to waste his or her time on short-term gains or trends. They’re looking for consistent, long-term growth.
To calculate your CLV, take the average sale per customer multiplied by the number of times a customer buys per year, multiplied by the average retention time in months or years for your average customer. By keeping an eye on this key performance indicator, it will help you see whether or not your existing customer base needs a little more love.
On the flip side, here are a few metrics (there are plenty more) from marketing guru Neil Patel that can suck your time and be misleading:
- Facebook fans and likes: It’s awesome to see increased page likes on your social media channels, but it doesn’t really matter if they’re not giving you valuable traffic that turns into more sales.
- Total links: Backlinks (especially ones from Google My Business) to your content will help your search engine optimization (SEO), but don’t waste your time trying to amass thousands of them. Instead, forget the numbers and put your focus on getting high-quality links.
- Traffic and page views: Same as with links, all of the traffic in the world doesn’t mean anything if your visitors don’t do anything once they’re on your site.
The Power of Being Human
Finally, although analyzing and tracking data can be a real asset to your business, don’t lose yourself in it and forget the importance of simply being human.
Donald Miller of StoryBrand speaks to this point so beautifully:
Let me explain ...
Marketing can be a technical job, right? Some days can feel like an endless parade of spreadsheets, analytics, and checklists.
And of course, those things are part of any good strategy. But when we focus too much on them, we over-systematize our marketing…we lose sight of the deeply human reasons that motivate every buying decision.
When people buy things, they’re not acting as perfectly rational human beings. The best marketing is overwhelmingly human and speaks to the emotional aspects of our decision making. What challenge do you help your clients overcome? How are you helping them become the person they want to be? When we answer those questions, we invite clients into a story!
When a person feels like they can trust you—when they truly feel you’re guiding them to a successful outcome—they’ll follow your lead. Because you’re offering more than just a product or a price point. You’re offering them transformation.
And if the marketing aspect of your job feels uninspiring, you may have lost sight of this key truth.”
What Miller means is that marketing speaks to our emotions, and while focusing on the measurables outlined above to understand which pieces of your marketing are effective, the best marketers never lose sight of the human element.
DAVE SCOTT, president of Scott Digital Marketing, has been a channel marketing pro since 2012, helping channel vendors, MSPs, and technology firms save their businesses from wasting money on bad marketing. Previously, Scott was chief marketing officer at ConnectBooster. He and his team offer six specific outsourced marketing services: content and inbound marketing, SEO/SEM, email marketing, social media marketing, paid advertising solutions, and copywriting services. Scott and his team are based in Minneapolis and Fargo.