As a B2B healthcare CMO, you ensure your company's very existence. But measuring that contribution or proving the value of a specific marketing campaign can be a challenge. That's especially true when we go beyond easy-to-track metrics like click-through rates and start talking about that infamous B2B healthcare ROI.
But ROI may not be as elusive as you think. With this simple framework, you can get the whole picture and start breaking down what's delivering ROI and what isn't.
Choose the Right B2B Healthcare ROI Metrics
You track many metrics — email open rates, lead-to-conversion, website traffic, and so on. They're all critical within a particular context. Together, they tell a story.
With that said, too many metrics can obscure your view when calculating ROI. In these circumstances, tracking and understanding become drudgery — one of your least favorite things. So, you put it off and fail to realize the benefits of regularly assessing your healthcare marketing ROI.
Instead, narrow this down to get to the heart of B2B healthcare ROI. You can track it consistently and realize the most value from it when you do.
Healthcare Marketing Acquisition Costs
Acquisition costs are all costs that go into acquiring a new B2B healthcare account. Since you need to know which channels deliver the highest ROI, it's important to divide up your costs. Depending on what percentage digital marketing is of your marketing mix, you might divide it by digital, direct mail, paid ads, events. Or you might break it down by platform — LinkedIn, Facebook, Google Ads, Remarketing, Email.
This helps you answer two crucial questions. 1) How much do you need to spend on this channel to get results? 2) Is it worth it? In other words, should you be focusing elsewhere?
Additionally, to get the whole picture of acquisition costs, don't seclude marketing and sales to their respective siloes. Let's say marketing cuts costs. But, as a result, poorly qualified leads are hitting the sales team. You didn't lower acquisition costs.
You've heard it before. You'll pay 5X as much to acquire a new customer as you will to keep one. Your churn rate directly impacts your ROI.
On top of that, your existing customers are more likely to try new offerings and upgrades when you launch them. Those with whom you have not yet built a B2B relationship may hesitate. So, it's no wonder existing customers are up to 14 times more likely to buy your product than new customers.
B2B healthcare companies that achieve high retention rates know how to delight customers on an ongoing basis with helpful, relevant content personalized to their customer journey through marketing automation.
Contact Engagement Rate
Now, some will argue this metric is unimportant and even a vanity metric. Do a bunch of likes on Facebook really mean anything at the end of the day? Let's just focus on the number of sales-qualified leads and retention rate, right?
But we'd argue engagement rate is crucial when measuring healthcare marketing efficacy.
You'll have a better understanding of how and why certain campaigns are increasing or decreasing your ROI. The more personalized and relevant your content is to your new and existing customers, the more they engage with it. This provides you with an early indicator that marketing is on track to deliver ROI. So yes, this should be part of your ROI calculation.
But let's be clear. Engagement alone doesn't generate B2B healthcare ROI. In fact, the opposite can happen — negative ROI.
However, to ensure engagement = ROI, you need a clearly-defined inbound marketing sales funnel. That way, a predictable percentage of this engagement consistently generates the Marketing Qualified Leads (MQL) that become Sales Qualified Leads (SQL). The value of that percentage of measurable engagement actions that become SQL provides you with a value you can apply to an ROI equation.
You have to spend money to grow your business. There's no getting around that. But not all spending that doesn't generate ROI isn't worth it.
Your contribution margin is revenues minus variable costs. Variable costs are costs that rise or fall in line with the revenues you're generating. For example, if you increase your AdWords ad spend by X amount, you should increase revenues proportionally. This metric further amplifies ROI discrepancies. If increasing ad spending doesn't predictably increase revenues, you need to take a deep dive into what's not working for you.
Are you delivering the right message to your target audience? Should you focus your spending elsewhere? Are your marketing campaigns delivering the ROI you need to justify your efforts? Are you struggling to prove the ROI in C-suite and make the case for the automation technology you need to compete in B2B healthcare?
Find out how Relequint helped one B2B healthcare company increase contact conversion by 59%. If you want to learn how to improve your ROI tracking and reporting, then simply start with an assessment. Relequint’s B2B Balanced Scorecard will help you align your overall business goals with your strategy to increase your healthcare ROI. Click here to learn more.