Measuring ROI in 2024

This content was originally featured in the May 22nd, 2024 newsletter found here: INBOX INSIGHTS, MAY 22, 2024: MEASURING ROI IN 2024, INSTAGRAM BRAND PERFORMANCE

I thought I’d try an experiment this week. We’ve spent time internally building custom models for various purposes. I was curious how close to a polished post I could get by using a couple of them together. Here’s what I did:

We’ve built our Ideal Customer Profile model, which includes data around pain points and goals. I asked that model to give me a list of topics our ICP would want to read more about. After some iterating, the strongest topic measuring ROI. Great, now I know what content to put together.

Next, I took that topic and opened up KatieGPT. This is the custom model we’ve built a few months ago based on my knowledge and content. KatieGPT is my digital doppelganger. I asked KatieGPT to write a post about measuring ROI in 2024 using the 5P Framework.

My question to you is: how did the systems do? If I hadn’t told you that I didn’t write this, would you know? I’d love your feedback.

Here are the AI-written results:

MEASURING ROI IN 2024: A PRACTICAL GUIDE USING THE 5P FRAMEWORK

Introduction

As we navigate the complexities of marketing in 2024, understanding your return on investment (ROI) is crucial. With new tools, privacy regulations, and evolving consumer behaviors, the 5P framework—Purpose, People, Process, Platform, and Performance—provides a structured approach to effectively measure and optimize your ROI.

Purpose: Define Your Goals

Start with a clear understanding of what you aim to achieve. Your goals will guide which metrics to track and how to measure success. Consider:

• Sales Growth: Target metrics like revenue, average order value, and conversion rates. For example, set a goal to increase online sales by 20% over the next quarter.
• Website Traffic: Focus on page views, unique visitors, and bounce rates. You might aim to boost website traffic by 30% through improved SEO and content marketing strategies.
• Customer Engagement: Measure social media interactions, email open rates, and time on site. Set a goal to increase social media engagement by 25% through targeted campaigns and interactive content.

Clearly defining these goals ensures everyone is on the same page and that the metrics you track are aligned with your business objectives.

People: Identify Key Stakeholders

Identify who needs to be involved in your ROI measurement process. Include team members from different departments to ensure comprehensive data collection and analysis. Collaboration is key:

• Marketing Team: For campaign insights and execution. They can provide data on campaign performance and audience behavior.
• Sales Team: To correlate marketing efforts with sales outcomes. They offer insights on how marketing leads convert into sales.
• Data Analysts: To manage data collection, integration, and analysis. They can ensure the accuracy and relevance of the data being used.
• IT and Compliance: To ensure data privacy and security. They ensure all data collection practices comply with the latest regulations and standards.

Engaging all relevant stakeholders from the beginning ensures a holistic approach and that all perspectives are considered in the ROI measurement process.

Process: Establish Robust Tracking Systems

Implement processes that enable accurate data tracking across all marketing channels. This includes:

• Multi-Channel Tracking: Integrate data from Google Analytics 4 (GA4), CRM systems, social media analytics, and email marketing tools. For instance, set up GA4 to track user interactions on your website and use a CRM to track lead progression.
• Data Governance: Ensure data integrity and compliance with privacy regulations. Establish protocols for data handling, storage, and sharing to prevent data breaches and maintain user trust.
• Regular Audits: Conduct frequent reviews to keep your data and processes up to date. Schedule quarterly audits to check the accuracy of your data and the effectiveness of your processes.

A well-established process ensures consistency and reliability in your data, which is critical for accurate ROI measurement.

Platform: Choose the Right Tools

Select platforms and tools that will help you gather, analyze, and visualize data effectively. Key considerations include:

• Google Analytics 4 (GA4): For comprehensive web and app tracking. Use GA4 to track user behavior, conversion paths, and attribution.
• CRM Systems: For tracking customer interactions and sales data. Tools like Salesforce or HubSpot can help manage and analyze customer data.
• Social Media Analytics: To measure engagement and performance on social platforms. Use tools like Hootsuite or Sprout Social to track social media metrics.
• Marketing Automation Tools: For tracking email campaigns and customer journeys. Platforms like Mailchimp or Marketo can automate and analyze email marketing efforts.

Choosing the right tools ensures that you’ve got the necessary capabilities to track, analyze, and report on your marketing activities.

Performance: Measure and Optimize

Focus on performance metrics that align with your goals and provide actionable insights:

• ROI Calculation: Use the formula (Net Profit / Cost of Investment) x 100 to determine your return. For example, if your campaign generated $50,000 in revenue with a $10,000 investment, your ROI would be 400%.
• Predictive Analytics: Employ machine learning tools to forecast trends and optimize future campaigns. Tools like IBM Watson or Google Cloud AI can help predict customer behavior and campaign outcomes.
• Marketing Mix Modeling (MMM): Analyze how different marketing channels contribute to overall performance. MMM can help identify which channels are most effective and where to allocate your budget for maximum impact. Applying the 5P Framework to Measure ROI

1. Purpose: Set specific goals such as increasing online sales by 20% over the next quarter, improving website traffic by 30%, and boosting social media engagement by 25%.
2. People: Involve your marketing, sales, data analytics, and IT teams to ensure all aspects of your campaign are tracked and analyzed. Ensure each team understands their role and the importance of their contributions.
3. Process: Establish robust tracking systems to monitor user interactions from the first touchpoint to the final sale. Conduct regular audits to ensure data accuracy and compliance.
4. Platform: Utilize GA4 to track web traffic, your CRM to monitor sales data, and social media analytics tools to measure engagement. Ensure seamless integration across these platforms for a comprehensive view.
5. Performance: Calculate your ROI using the (Net Profit / Cost of Investment) x 100 formula. Use predictive analytics to forecast future performance and adjust strategies accordingly. Leverage MMM to optimize your marketing mix.

Conclusion

Using the 5P framework—Purpose, People, Process, Platform, and Performance—you can effectively measure and optimize your ROI in 2024. This structured approach ensures that all aspects of your marketing efforts are aligned, tracked, and analyzed, providing you with actionable insights to drive success.

What challenges have you faced in measuring ROI? Reply to this email to tell me or come join the conversation in our Free Slack Group, Analytics for Marketers.

– Katie Robbert, CEO