Recently, a study conducted by SiriusDecisions demonstrated a rapid increase in the demand for Marketing Automation, with the industry projected to grow at approximately 50% by 2015. But once the automation system has been implemented, how does one determine whether it is working for them or not or in other words, compute the return on their investment.
Calculating ROI by looking at the revenue vis-à-vis the cost incurred on implementing the system is a rather limited and one-dimensional view of the system’s effectiveness. In order to analyze the true value or return from your Marketing Automation system, one must go beyond that and look at other factors which are equally important for ensuring that the quality of leads remain high and you derive true value from your Marketing Automation efforts.
Here are some of the metrics that one must analyze along with revenue in order to compute the true ROI of the Marketing Automation investment:
Efficiency Metrics
This set of metrics measure the efficiency of your current Marketing Automation campaigns and programs.
-
Open, Close and Bounce rates
These metrics give an insight into the overall quality of your campaigns – from subject line to the copy to your call to action. If there is an increase in the open rates, it means your campaigns are working.
-
Conversion and Reconversion Rates
The conversion rate gives you an insight into how well your email triggered intent on the part of the customer. If the increase in open rate is accompanied by an increase in conversion, it means your campaigns are working and that you are deriving considerable value from your investment.
-
Increase in Site Traffic
If there is an increase in the website traffic or traffic to a landing page as a result of the Marketing Automation solution, it points to a positive return on your investment.
-
Number of Sales Accepted Leads
Another important metric to measure whether your Marketing Automation solution is providing you returns is by measuring the number of sales accepted leads. An increase in the number of sales accepted by leads refers to the success of your Marketing Automation efforts.
Engagement Metrics
The second set of metrics analyzes the manner in which your prospects and leads interact with you as a result of the implementation of the Marketing Automation solution:
-
Subscribe and Unsubscribe Rate
If your marketing campaigns are designed and executed in a way that the number of people subscribing to your content is increasing means your Marketing Automation solution has been implemented in a manner that works for you. These subscribers can with careful nurturing be converted to loyal customers, which is where rests the true value of this system.
-
Referral Rate
The referral rate refers to the rate of increase of referrals from your current prospects/customers. An increase in the referral rate is a positive sign since your message is spread by your advocates on your behalf and reduces the burden on you for promoting your campaigns.
-
Virality and Share Rates
Virality is a metric that measures the rate at which your content is being shared across the web as a result of the interactions from people who have been exposed to your campaigns. An increase in virality as a result of implementing an automation solution is a sign of positive value for a business.
Value Metrics
-
Revenue Generated
Till now we looked at some intangible measures of value, and now it is time to look at one of the most important drivers of Marketing Automation for companies – revenue. If there is an increase in revenue as a result of the above mentioned points (i.e increase in qualified leads, higher engagement rates etc.), it means you are generating positive value from your investment. This value when compared with the cost will help you determine the tangible ROI of your Marketing Automation efforts.
-
Cost
The cost of a Marketing Automation system is not just the cost incurred for setting it up, but also the amount spent on manpower that is handling these campaigns, cost incurred per click or per impression for display and paid search campaigns. It is important to measure the number of qualified leads vis-à-vis the cost per lead to determine if there is true return on your Marketing Automation investment.
