The ROI of content marketing should be a top concern when you embark on a content plan. A return-on-investment should be demonstrated by any type of marketing. Content is no different.
Before you start anything, you should have a good idea of what you mean by ‘return’ and what you mean by ‘investment’. Those two words suggest you send out some content, and end up with cash as a direct result.
But return may be judged by number of new sales leads, for example. Not all of them will convert to customers right away. But if 10 per cent of your leads normally convert, then getting a larger number of them will make your costs—your ‘investment’—much lower per customer.
In the old days of direct marketing by snail mail, you knew that you had a product you sold with a margin of, say, $100. You could purchase a list for $5000 (for the sake of neatness), which had 100,000 names on it.
You would need 0.5% of the people on that list to become customers to cover your marketing cost. A conversion rate of anything greater than that, and it would be a successful campaign.
Getting an ROI on email marketing
Because email is seen as cheaper, we run the risk of losing that focus we used to have with direct mail. You do need to track email and make sure that what you’re doing is working and that you’re not just wasting your time.
We’ve got a lot more that we can track. Depending on what your objective, your return on investment may not necessarily be monetary. For the first 12 months your primary objective might be to grow your list. Your return on investment is getting your content shared and amplified and getting people to engage with it in a way that they’re happy to sign up to get your email newsletter to receive more.
Working out your ROI on content marketing
You work out an ROI on content marketing by first setting clear goals. Go back to your strategy, set an objective and measure it.
You should also be measuring sales. With the right email marketing software, you should be able to follow a customer from when they have engaged with your content, all the way through to when they make a purchase.
It’s important to also look at other channels than just your online web store. Unfortunately for us, customers aren’t always polite enough to follow the neat journey we have set out for them. Somebody might go some part of the way down that journey and then get another phone call and disengage, but tomorrow call into the call centre and buy.
Make sure that you’re measuring it on all of your sales channels of where those leads are coming from.
When do you know your content marketing is working?
You can’t know if your marketing is working if you’re not measuring it in the first place.
If you start a content strategy tomorrow and you’ve got a great database, you may have a bunch of people already at the bottom of the funnel. You might see that by starting to content marketing and putting out bottom of the funnel content that you start getting conversions right away.
Traditionally it’s a long journey to start people from when they’re investigating a problem to converting to a sale. We’d say to clients, “Don’t expect to see anything for six months”. If you over-promise and the client is expecting that this is a silver bullet, they’re going to be disappointed. They’re not going to start seeing a massive increase in sales next week. It can be up to a year.
The important thing to note is it DOES work if you do it properly. And you can measure it all along the process to see that happening.
There is no industry that content doesn’t work for. Because for that to be the case, that industry would have to be not solving anyone’s problem or fulfilling anyone’s desire. If the industry exists then the opportunity for content marketing exists, by default. The trick is just understanding what it is that that industry does for its customers.