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How to prove the value of marketing

How to Prove the Value of Marketing for Your Business

In this video, Madison from our Earned Media team will walk you through how you can prove the value of marketing to your company. Keep reading to learn more!

Transcript

If you work in marketing, it seems obvious that marketing is important for your business. And it is. We totally agree. But its importance may not be obvious to some of the decision-makers at your company. They need proof that the work you’re doing is helping to grow the company. They need to know that their investment is making them money, not draining their resources.

So, how do you explain to your boss that the work you’re doing is actually making an impact? How can you prove the value of marketing for your company? We have some pointers for you.

Include revenue-focused metrics in your reporting

The decision makers at your company want to know how your marketing efforts tie back to the company’s overall financial performance. This means you need to track the key performance indicators (KPIs) that influence the budget.

While website traffic and keyword rankings matter, and they’re definitely metrics to track within your marketing department, they’re not necessarily things your CFO or CEO can use to measure company performance. So, track them, but don’t stop there.

Let me explain a few revenue-focused metrics you’ll want to include when you report back to the higher ups.

Return on investment (ROI)

ROI shows how much revenue your marketing earns relative to how much it costs. Some tactics, like PPC ads, require a larger monetary investment than others, like SEO.

If you can demonstrate that the costs are significantly less than the financial benefits, you can convince your company to continue investing in marketing. You can measure ROI for your marketing efforts as a whole, but you can also measure ROI for individual channels and campaigns.

Revenue per channel

This measures how much revenue each marketing channel brings in during a set period, like SEO or digital ads.

Tracking this metric not only lets you show marketing value for your team, but also lets you demonstrate the value of each individual marketing channel that you use. If there’s one thing that will convince your company to support a particular marketing channel, it’s showing that it brings in revenue.

Customer Acquisition Cost (CAC)

CAC measures how much you spend to get new customers. After a bit of math, the number you get represents the total you spend per customer. You don’t want the CAC to exceed the revenue each customer brings you.

Lower CAC means more revenue goes to that important bottom line, which makes your business grow.

Customer Lifetime Value (CLV)

CLV represents how much someone will contribute financially to your business over their time as your customer. So, will they make one $500 purchase and never come back, or spend $10,000 over a period of 5 years? You’ll also factor in your CAC to get the true value of your customer’s business.

Your marketing can have a big impact on this metric, first by drawing in the most qualified leads and then keeping them engaged after they’ve made a purchase.

Conversion rate

Conversion rate can mean different things depending on what type of conversions you’re tracking. For example, maybe the conversions you’re tracking are sales. In that case, the conversion rate represents the percentage of your leads that convert into customers.

Maybe you’re tracking email signups. In that case, the conversion rate is the percentage of people who see your email signup form and actually sign up. This metric can vary from business to business, but it can ultimately feed right into your revenue.

Lead generation rate

Driving sales might be the ultimate goal, but people only become customers after they’ve first become leads. That means your lead generation rate is another major indicator of your marketing team’s success. The most common way to measure lead generation rate is to calculate what percentage of your site visitors become leads.

You can even break this down further by tracking lead quality. For one, there are marketing qualified leads (MQLs). Typically, MQLs are very solid leads that meet all the criteria necessary to be passed on to your sales team for further qualification. The criteria for a lead to become an MQL is entirely up to you, but it may include industry, company size, content downloads, and many other targeted interactions with your business.

You have sales accepted leads (SALs), which are MQLs the sales team has decided to look into further. The SAL stage kicks off a lead’s journey through the sales funnel.

Then, there are sales qualified leads (SQLs), which are typically SALs that your sales team has talked to and learned more about. An SQL is in the stage where they’re likely ready for a pitch or proposal.

So, those are a handful of revenue-focused metrics you should pay close attention to when reviewing and reporting on your marketing performance.

Of course, not every marketing channel will drive conversions or revenue on its own. But just because they don’t directly make money doesn’t mean they’re not important.

Connect non-revenue-focused metrics to your company’s market share

If you eat up all the market share you can and become a key player in your industry, you’re sure to capture more leads from your competitors and, ultimately, earn more revenue.

If you say, “This strategy increases brand awareness, so we should invest more in it”, a CEO might hear “Spend more money on something I can’t measure”. Budget denied.

Instead, try using your non-revenue-focused metrics to prove that you’re taking space from your competitors through your growing online presence.

Search rankings

You can show marketing value by tracking where your web content ranks in search results in relation to your competitors. This is a pretty important metric, since without high search rankings you won’t get much website traffic. And without website traffic, you won’t drive many conversions.

If your competition ranks at the top, and you don’t, they’re gobbling up all of that delicious search traffic and you’re losing market share. So, especially if you’re dominating the search results, make sure to highlight how you’re doing vs. your competitors when you present this information.

If you can show that you’re driving high search rankings and high website traffic, you can keep company support going for your search engine optimization efforts. And if you’re not doing so hot, you can reason that more of an investment will help you gain market share and beat out the competition.

Site traffic is also a great metric to demonstrate your growing digital presence.

Social media engagement

Social media interactions might not seem like much on the surface, but your audience’s engagement is a valuable asset that helps you grow brand awareness, build trust, and form long-term relationships. All of those things ultimately lead to increased revenue. Traffic to your website from social media, follower count, clicks, and shares are all great indicators of a successful social strategy. They put a number behind the enigma that is brand awareness.

If you don’t have a presence on social media, and your competitors do, they’re dominating the conversation and forming those relationships. You’re missing out on those coveted gains in brand awareness, market share, and thus, revenue.

See? It all ties back to the bottom line.

Let people see your marketing efforts

Another way to show the value of your marketing is to be more visible. Let your company see the work you’re doing. Consider providing regular updates to your company’s decision-makers on what you’re currently working on. Or have some sort of to-do list or calendar that outlines everything you have planned for the future. This documentation will help marketing outsiders better understand and appreciate the work you do and the value you bring to the company.

I know, you were probably expecting these tips to be about providing hard evidence, not just helping people appreciate your work. But you’d be surprised how much of a difference it can make to just have your marketing efforts be visible. Most executives understand that not every marketing activity is able to be tied directly to revenue.

Part of the reason executives might doubt the value of marketing in the first place is because they don’t see the scope of what a marketing team actually does. You know it’s more than just posting memes to social media. There’s content marketing, SEO, web development, CRO, PPC, CTV…the list goes on.  But your boss has their own responsibilities to worry about, so watching every single thing you do for your marketing strategy is probably at the bottom of their list.

So, let them see your team’s massive efforts whenever you have an opportunity. Explain what you’ve worked on and what you have up your sleeves. It may just be a matter of not understanding marketing’s role in an organization.

Show off your achievements

On top of letting your company’s decision-makers see the work your marketing team is doing, let them see all your best achievements. Whenever you hit a particular milestone or accomplish a particular goal, don’t just celebrate internally — share that celebration with your company executives.

For example, maybe you have a YouTube channel where you post helpful content for your audience, and you eventually pass 10 thousand subscribers. That’s a big accomplishment that you should share with the higher-ups at your business!

If you don’t let your company executives see your achievements, they won’t understand the value you bring to the company as a whole. But if you show those achievements off, it’ll be very clear what you bring to the table.

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Learn more about the value of digital marketing from WebFX

Well, that’s it for this video. Now that you know how to show the value of marketing to your business leaders, you can get to work proving how important you are to your company’s success.

Of course, maybe you still have questions about how to drive better results with your marketing. If so, make sure to subscribe to our YouTube channel and our email newsletter, Revenue Weekly.

Thanks so much for watching. See you in the next one!

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