This post was also published on Sounding Board, a blog from The Radio Agency where I serve as a Marketing Consultant.
Recently I’ve become involved in many, many more conversations about marketing metrics, calculating ROI (return on investment) for radio, the best tools to track results, and why it all matters. It came to a head today when I read a blog from a marketing software company in San Mateo, CA. The author is the company’s Managing Director of Europe and describes his favorite marketing tool — the advanced metric Pipe-To-Spend — like this:
If a CMO spends a dollar on a particular programme then it’s very useful to know how much pipeline was generated by that dollar. A figure above 10 is a good starting point because it means that if I had a pipe to close of 33% than my marketing programme dollar would have generated over $3 in bookings. The Pipe-to-Spend also tells me that prospects are being worked through the funnel and that sales are accepting marketing generated leads. So if this figure is high then it probably indicates a well working funnel process, a low figure of course indicates that a deeper look at the finer detailed metrics mentioned above to see if there is a process or programme selection problem.
It all seems so simple, until you start working out the process to develop this advanced metric. First, your sales team needs to track and report closing ratio. This is probably something your sales managers do anyway, so we’re off to a good start. Next, your marketing team needs to track and report spending AND attributable leads. Since you’re likely placing both traditional media (like radio) and digital media, or at the very least taking leads over the phone and through the Internet, you need to separate your sources and track them as they flow through your sales funnel. This might be a tougher sell, since it will move the focus of your marketing team from churning out cool creative to measuring impact on revenue and profitability. Finally, you need to work out how to mash up these two disparate sets of data into one set of numbers that mean something to your accounting or executive team and show financial metrics like profit, cash, and revenue. Yikes!
OK, that’s a big task, but don’t give up just yet. Using radio is a powerful and efficient tool to generate leads and revenue — one of the most efficient in fact — and tracking results should never get in the way of getting results. It’s important to know why a metric like Pipe-To-Sales is complex and to break down that complexity into manageable parts. If you do this, you’ll be able to take advantage of the cost-efficiency of radio AND track your results as they flow through the funnel.
Here are three tips to help you track a radio campaign, so you can determine how much of your pipeline it generated:
- Establish a baseline metric (or a series of metrics) that you can use to benchmark success. If you’re creating 100 new qualified leads per month with only an outbound call center and no marketing and that increases to 200 new qualified leads per month once you layer in a marketing campaign, you immediately know one specific way that your marketing is contributing.
- Use a different phone number or unique URL in each radio commercial you run. You can track in-bound calls and clicks from each source to determine which is driving the most revenue and then adjust your campaign spend to reward the best-performing assets.
- Keep an eye on secondary web stats like organic and paid search results. The way that people consume radio means they’ll often come back to your call to action later, and if they don’t remember your phone number, they may do a web search for your company name or product.
For many years, we’ve worked to develop systems that track AND improve ROI. If you’d like to learn more about how we can help your business grown, please contact us.