As a digital marketing agency, proving ROI to a client can be a tall order at times, depending on the marketing strategy. KPIs wildly vary from client to client and even industry to industry and depending on the goal of a particular marketing strategy, it may be difficult to demonstrate any indication of progress' or positive ROI that your agency has been able to produce.
Certainly, you know what you're doing you have all the meaningful data that shows how your execution and ideation are affecting performance! Unfortunately, your client may not be fluent in the language of data and the story you're trying to communicate may still need to be constructed further in order to communicate meaningfully to your client.
This is where the skill of data visualization comes in. Your data might not be easily digestible by your client, so it's your job to present the data in a report that concisely and accurately depicts the positive return on investment that you're generating for them.
Producing an ROI report
When producing a report on client' return on investment, it's best to focus on just a few metrics that easily convey that your work is leading to improvements in conversions and sales, or whatever other value metrics you're tracking. Avoid the temptation of pasting all the data and learn to distill the data until you have a concise story that clearly communicates your value.
Before we get to what metrics are ideal to utilize, let's concern ourselves first with how we depict any data.
Create the report once a month to ensure that your client is always on top of any performance reports.
Your preferred means of presentation should be an infographic with just a few pages simplicity is key, after all, and infographics are effective because they condense complex ideas into small but beautiful spaces.
A growing trend in presentations is the narrative, storytelling style, which showcases a timeline of cause and effect. Connecting causality to every performance improvement will show your client exactly what your agency is doing for the client. Show the actions and steps you've taken to execute your digital and social strategy and link these actions and steps to direct positive effects.
Important Metrics To Use in ROI Marketing Reports
The three reports your marketing agency needs to demonstrate ROI are: Total Traffic Generation, Conversion Rates, and the Value of Each Visit.
Let's jump right in and break down what these three categories include.
1. Total Traffic Generation
If you're driving leads down a sales funnel or to a website, there's nothing quite as reliable as a big fat traffic generation figure to show off to your client. More traffic is a ridiculously versatile metric that can mean more conversions, a higher search engine ranking, and greater brand awareness.
Of course, it's important to distinguish among the different kinds of traffic that your site is receiving, so as to improve the storytelling of your report. Using analytics tools such as Google Analytics, you'll want to be breaking down your traffic report into:
Direct Traffic
Where the user entered your client's site URL directly into the address bar, or via a bookmark. In this case, you don't know how the user was driven to your website, so it may not be related to your marketing strategy.
Organic Traffic
This consists of users who found your client's site naturally through search engine results. You may attribute organic traffic to your SEO efforts in pushing your client's site up the search results rankings.
Social Media Traffic
Which comes from users who are driven to your client's site from links on Facebook, Instagram, and other social media networks. Big social media traffic results mean that your social campaigns are a blast.
Referral Traffic
Which comes from non-search engine external sites that backlink to your client's site. A good link-building strategy (hopefully a legitimate one, please, and not one that uses a shady private blog network!) will be the cause of high referral traffic.
Email Traffic
This traffic refers to anything driven by your email marketing campaigns. Generally, email traffic is connected to organic traffic as you create valuable gated content that gathers emails to fuel your email marketing campaigns.
PPC Traffic
Which is traffic driven by Google AdWords and other advertising platforms.
As you can see, traffic generation is a complex beast with a variety of parameters! You may choose to omit individual types of traffic if they're not useful to your report, or add other kinds of traffic if applicable.
Decompressing your traffic in your report can show not only the positive marketing ROI your company is having on your client KPIs, but also which aspects of your marketing campaign are doing best, and which ones may have room for improvement.
In addition, each type of traffic has its own characteristics and attributes that can be demonstrated in your report. For example, email marketing has excellent conversion rates, especially when compared to social media, so showing large amounts of email traffic can suggest great conversion of course, use data to prove this whenever you can!
2. Conversion Rates
Money talks, and so do conversions, which are by definition the transformation of a generated lead into a paying customer. The trouble of course with reporting something like traffic statistics is that even if you show a hugely increased number of people visiting, if your actual paying customers don't increase to reflect this, with the amount of new traffic, then your conversion rate is dropping and there's possibly something wrong with your marketing.
In this scenario, more people are definitely interested in the idea of your client, but aren't interested enough to close the deal with you!
Therefore, demonstrating an improved conversion rate, with or without growth in traffic, means that you're directly improving the effectiveness of your marketing campaigns. Show not only improvements in overall conversion rates, but also decompose the report into improvements on individual landing pages, social media channels, and the like.
The objective is to show precisely how your efforts are paying off, and seeing previously underperforming channels suddenly rise in performance is a great way of illustrating the value you create.
3. Value Of Each Visit
Now that you have both conversion rate and traffic statistics down pat, it's time to cheat a little and offer your client the value of each visit. Sure, it's a derived quantity, literally as simple as dividing the amount of traffic over a given period of time say, a day by the number of conversions during that time.
However, it's an essential metric because if you're showing improvements in both conversions and traffic, then mathematically, you're going to show a massive jump in value per visit, and that's great news for your report!
Value per visit is often a direct KPI for any client with products on their website, and it takes on a whole new meaning if the website is a straight-up eCommerce platform. In such a case, it becomes possible to explicitly measure the value of a visit by the amount checked out in the shopping cart and ultimately paid for.
The Benefits Of Measuring ROI
Now before you go off and voluntarily create an SEO ROI report to appease the suits, take this opportunity to create even more value for your agency in the eyes of your client.
Having an ROI report doesn't just show how valuable you are to the client and that they should keep having you on retainer. It also demonstrates the value of a social media or digital marketing strategy in general! If your ROI report depicts an uptick in sales, greater brand awareness, or other benefits to the client, it's a strong selling point on the merits of social and digital, just in case anyone in the C-suite is still iffy about the brave new world of digital.
On top of that, a comprehensive ROI report will also demonstrate a lot of information about a company's target demographic, including their perceptions, preferences, and any room for improvement in the strategy.
You may even use positive ROI as leverage for an increased budget. Nothing gets board members and chief executives going like green arrows and ever-increasing graphs.
Conclusion
You've learned about the best reports to build to demonstrate ROI, and they're pretty much all you need to show your client that their investment in your agency is paying dividends. Keep in mind of course that you may include other reports such as bounce rate, detailed social channel performance, and how deep your leads end up in the sales funnel on average.
Just remember that if you can concisely prove your value to your client in simple, digestible figures, without drowning them in a smokescreen of numbers. Every marketing campaign will differ but the principles remain the same: identify value metrics, relate your marketing efforts to those metrics, and provide a clear visual narrative that takes everything accomplished by the marketing department and transforms it all into a story that powerfully convinces the client that their dollars lead to a thriving campaign performance.
