How to determine the ROI of your marketing (without analytics)
Do you sometimes wonder which of your marketing efforts have the highest ROI?
It's a question we've been pondering quite a lot. At Close, we do a ton of things to promote our sales platform, but we don't really always know which ones are effective and which ones are mostly a waste of time and money. We have ideas, opinions and theories, but not enough data. And you need to be able to tie your marketing expenses to the results you generate.
(We thought) we needed analytics!
To remedy this, we planned on installing a super-sophisticated analytics and tracking solution to get a clearer picture of what really drives our signups, to get a better understanding of the customer journey from discovery to purchase.
But we also had our heads down in other activities, because, you know, this is a startup, and in a startup you're never not busy. We perpetually kept postponing the set up of proper tracking magic.
One day, I was talking with my friend Noah Kagan from AppSumo and Sumo fame, bouncing marketing and sales advice off each other. At one point, he asks me this next question.
"What's your most effective marketing channel?"
I flinched a bit, and embarrassedly responded: "Well, the thing is, we haven't gotten around to setting up the kind of analytics we need to really pinpoint that, so, I really don't know."
Noah: "Dude, almost nobody has set up all their tracking correctly. Forget about that for now. Just get on the phone and call your customers, and ask them how they found out about you."
WOW. I was SERIOUSLY embarrassed.
I am the guy who's telling others that they should call new users within five minutes.
I am the guy who's been advising startups to visit their customers.
I am the guy who's been telling startups to pick up the phone and start dialing for years.
I am a relentless proponent of unfiltered 1-on-1 conversations with customers.
And here I am getting lost in complexity, instead of talking to my customers. Duh.
So guess what I did after I got off the call with Noah?
I started calling our customers
I called recent signups and some long-time customers, and asked them, "How did you find out about us? What made you buy?"
Some of the answers surprised me a lot, and challenged some of my previous assumptions.
We're still in the process of working with these insights, and at some point there'll be a follow-up post where we share more about these learnings. We also recorded an interview with Noah about hustling so look out for that as well :).
What should you be doing next?
Start calling customers and ask them questions that help you understand how they discovered you to determine your most effective marketing channels today.
Tomorrow, of course you should go and build really amazing analytics and metrics dashboards and track everything as you scale your company, but don't waste a single minute wondering and worrying about your marketing ROI, thinking you can't know anything without technology. The abyss of analytics, as Jon Evans calls it, is real. All your need is a phone (or email) and some good ol' hustle. :)
Noah's the man! Thanks for reminding us that most answers are easy to get if you look at the most obvious places first ;).