How do you measure marketing return on investment?
Start from revenue and work backwards. The core measures are customer acquisition cost by channel, customer lifetime value and the ratio between them. Some influence, such as referrals, direct visits and long-term content readership, cannot be fully attributed, and reliable measurement accounts for both.
Lifetime value should be based on actual retention data from an established customer cohort. For newer businesses, a conservative estimate should be used.
Two straightforward methods help with unattributed influence: asking every enquiry how they found you, and tracking trends in direct and branded search traffic.
The measurement period should match the length of your sales cycle.
If every channel reports strong performance, check whether the same conversions are being counted by more than one channel.
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