Building Long-Term Business Value With Marketing
Our Top-Rated Marketing Tactics for Top-Dollar Exit Planning guide talks extensively about how effective marketing can set your business up for a successful sale. The main takeaway is that marketing builds business value independent of your ownership. This is very important while planning for an exit, as buyers want to see that your business has value that will outlive you.
If you own a successful business and are looking to sell, ask yourself:
- How much of my business’ success is dependent on my leadership?
- If disaster strikes, how long can my business outlast me?
- If somebody else starts running my business tomorrow, can they easily pick up where I left off?
- Are my employees loyal to my brand, or just loyal to me?
A common reason a successful business fails to sell is that prospective buyers aren’t confident that they can continue where you left off. Just because your business is profitable now doesn’t mean that it will continue being profitable after you leave the scene.
So, you must dedicate time and resources towards elevating the value of your brand, not the value of your position as the business owner. And start converting that value into sustainable enterprise value that can turn a profit for your future buyers.
Drafting Your Exit Planning Marketing Roadmap
Successful marketing efforts are a long-term affair, and it’s rare to see significant results overnight. That’s not to say there can’t be short-term improvements in website performance and conversion rates – oftentimes, our clients notice an immediate uptick in performance once we embark on a new marketing campaign.
However, if you want to build enterprise value that potential buyers will notice, we recommend marketing at least five years in advance of your planned business exit. Yet, developing a marketing plan with a lead time of up to ten years is optimal.
Although this might seem like an unrealistic timeline, an exit planning marketing roadmap of five to ten years will ensure that:
- There’s ample time for your team to recognize opportunities for improvement, as well as enough time to pivot
- Short-term results are converted into sustainable long-term results that outlive the marketing plan
- You can present prospective buyers with a marketing action plan that’s cohesive and time-tested
- Your business has enough time to build enterprise value that you can tie to your marketing plan
How to Measure Marketing Success: Delivery, Engagement, and Attribution
In its simplest form, the goal of marketing is to reach as many people as possible while convincing them to interact with your business. This can be broken down into two measurement components: delivery and engagement.
Delivery measures how many times your audience saw your ad, encountered your blog, or any other action that gives you visibility.
Key considerations for measuring delivery include:
- How many people did my marketing efforts reach?
- What’s the delivery frequency? Did they encounter my business once, twice, or more?
- How many unique touchpoints were there? Did they see the same thing multiple times, or did we show them different things across different channels?
Delivery is valuable – we want people to see what we’re doing after all – but your marketing plan is ultimately worthless if they go on their merry way without taking action.
This is where engagement comes in, and it’s the most valuable objective of any marketing effort.
Engagement measures how often (and to what extent) your audience interacted with what you delivered them. Key considerations for measuring engagement include:
- How many people visited my website or called me after seeing my ads?
- Did readers finish reading my blog when they found it, or did they get bored and leave?
- How many leads did my marketing tactics generate for me?
- How many sales came from my marketing tactics?
By combining delivery and engagement, we can effectively measure any piece of our marketing plan.
Sounds easy, right?
For the most part, looking at data and finding insights are the straightforward (and enjoyable) parts of marketing measurement. The trickier part of the process is getting the data in the first place – specifically attribution.
What is attribution in marketing?
Attribution is the process of finding the source of success. It answers the question: Which marketing tactic(s) contributed to achieving our business goals?
Through correct data-attribution, we can accurately identify what’s working and what’s not.
For example, if you knew that one of your billboards generated two leads and the other billboard generated none, you could improve the underperforming billboard based on the characteristics of the more successful one. Maybe one road gets more traffic relevant to your messaging than the other, or maybe the messaging on one billboard is superior. Regardless, this information gives you a place to start.
But what if you weren’t handed the data and had to get it yourself?
You’d have to figure out how many drivers saw your billboard and how many of those same drivers interacted with your business after they saw it. Also, who’s to say that the reason behind them engaging with your business wasn’t because of the billboard but because of an email you sent them later that evening?
This is the never-ending struggle we face with marketing measurement – but all hope isn’t lost.
The business landscape is becoming increasingly digital every year. This bodes well for exit planners looking to show business value through marketing because digital marketing is much easier to attribute.
All the tools, platforms, and integrations at our disposal give us the data we need to prove value, we just need to know where to look (and what to look for).
Forward-Looking KPIs and Metrics to Track
Metrics for Measuring Website Effectiveness
One of our favorite mantras is “your website is your #1 marketing tool” because a good website can be a game changer for any business.
Your website is your most reliable salesperson, working 24/7 while reaching people anytime and anywhere. It’s your digital storefront and should be the destination for most, if not all, of your marketing efforts. Because your website is the foundation of your digital presence, determining how successful it is at achieving your goals is a top priority.
The first thing to look at while measuring the effectiveness of your website is where your traffic is coming from. Marketers look at the sources or channels that brought users to the website to gauge its health:
- Organic Search traffic found your website in search results from Google, Bing, or a different search engine. Search engine optimizers use organic search to judge how effective their SEO efforts have been.
- Direct traffic either typed your URL directly into the address bar, clicked on a bookmark, or used some other method to travel straight to your website. If your analytics tool doesn’t recognize where a user came from, it will label them as direct traffic and call it a day. Bot traffic is also considered direct traffic.
- Social traffic arrived at your site from social media networks, such as LinkedIn, Facebook, or Instagram.
- Referral traffic describes users who navigated to your site from a link on a different website.
- Paid traffic came from your advertising campaigns. Depending on the ads you’re running and on which platform, paid traffic can be called different things, such as Display.
- Email traffic arrived at your site after clicking on a link in an email you sent them.
Metrics for Measuring Social Media Success
Social media is becoming an increasingly important indicator of brand value and business success. Demonstrating that a business is generating buzz on social media platforms is a boon to owners looking to sell because it’s tangible proof of online reputation. Additionally, it’s one less thing for your buyers to worry about once they acquire the business.
When showing social media success, focus on the following metrics:
- Reach measures how many people saw something related to your social media account. This includes mentions, stories, posts, page information, ads, or anything else that gives your business visibility.
- Impressions measure how many times you were seen on social media (people who see your business multiple times can contribute more than one impression, but will still only increase reach by one).
- Post Engagement represents any user interaction with your social media content. This includes actions such as likes/reactions and comments. The more positive engagement a post receives, the more successful it is.
- Page Likes and Page Followers can be viewed as page engagement. Much like post engagement, it shows how successful and impactful your social media efforts have been. The bigger the following on your social media pages, the more guaranteed post engagement you’ll receive.
Metrics for Measuring Email Campaigns
Delivering pre-built and engaging emails to your buyers is like adding a cherry on top of a company sundae. Building an audience receptive to your emails while maintaining a high sender reputation is a tough task and takes a lot of time.
Treat your email lists like gold, and report on the following metrics:
- Emails Sent describes the total number of email addresses that your email was sent to. This doesn’t take into account if the email was opened or even successfully delivered.
- Bounces or Bounce Rate tells you how many emails didn’t reach your contact’s inboxes. Soft Bounces are because of a full inbox or server issues, while Hard Bounces are because of email addresses that don’t exist. Bounce rates don’t necessarily measure how effective your email campaigns are but instead measure the quality of your contact lists.
- Open Rate is the percentage of contacts that opened your email once it appeared in their inbox. Although we don’t recommend relying on open rates alone to measure how effective your email campaigns are, it can be a useful metric for examining your subject lines and delivery timing.
- Unsubscribe Rate is the percentage of contacts that opened your email and requested to stop being contacted by you. Your email campaign’s unsubscribe rate doesn’t include people who delete your email without opening it.
- Click-Through Rate (CTR) is one of the most important email metrics to follow. It tells you how many of your contacts clicked on a link in your email. The higher this is, the more engaging your email was, and how successful it was at achieving your goals.
Metrics for Measuring Advertising Profitability
Digital advertising is a deceptively expensive endeavor for businesses. We say “deceptive” because ads are also very lucrative. However, if you aren’t properly tracking and measuring your ads, you could be misled into thinking you’re wasting money.
Measuring the following metrics will give you a solid foundation for judging the effectiveness of your ad campaigns:
- Impressions measure how many times your ads were shown. This is different from Reach, which measures how many people saw your ads. If your ads were shown five times to two people, reach would be 2, and impressions would be 10.
- Click-Through Rate (CTR) measures how many people clicked on your ad, compared to how many people saw it. CTR is measured as a percentage – if 100 people saw your ad and 5 clicked on it, that would result in a CTR of 5%.
- Cost-Per-Click (CPC) indicates how much each ad click is costing your business. If your CPC rises, it could mean you’re bidding on keywords that have become more competitive. In this instance, it might be valuable to pivot and target different keywords or rethink your ad copy and creative.
- Return on Ad Spend (ROAS) is the most telling metric when considering the success of your ads. ROAS is a ratio that compares the revenue generated by your ads and the cost to run the ads. For example, if you spent $100 on your ads and they generated $1,000 in revenue, you can present your ROAS as 10x, 1000%, 10:1, or $10 return for every $1 spent – they all mean the same thing.
Measuring Your Brand’s Online Reputation
It doesn’t matter how profitable your business is, buyers will think twice about the purchase if you have a questionable online reputation.
If not managed properly, your brand’s negative reputation could be so unsalvageable that the new owner would need to embark on a rebrand, which is a costly endeavor. Because of this, it’s important to demonstrate that your customers and partners positively receive your brand by presenting the following metrics:
- Online Reviews is the simplest reputation metric to track because there’s no guesswork involved – just find the reviews and see what your customers are saying! Visit job boards like Glassdoor, your Google Business Profile, directories like Yelp, or any other location where customers and employees can comment on your brand. Consider both the quantity and quality of reviews, as well as what they’re saying.
- Social Reach determines how infectious and influential your brand is. It asks the question: Who is talking about you, and what’s their following? If popular social media pages talk about your business and reshare your content, your reach is much higher than if only your employees are talking and sharing content.
- Customer Feedback is different from online reviews, in that it’s more informal and doesn’t involve explicit and public comments about your brand. Are your brick and mortar customers making comments about your website or social media activity? Do you get compliments or complaints about your digital presence?
- Share of Voice is a strong metric that compares how many people are talking about your brand to the density of conversations about your industry. If your industry is grade school, is your brand the popular kid, or is it your competition?
Incorporating Marketing Metrics Into Your Exit Plan
In an economy surrounded by uncertainty and volatility from the pandemic, rampant inflation, and a strained supply chain, it’s more important now than ever to demonstrate real business value to prospective buyers. Certainty sells, and the only way to sell your business at a price that suits you is to present a roadmap with proof of value. Marketing metrics are the key to verified value.
Marketing takes time, and a business that has a strong online reputation, a good website, and successful (and provable) marketing efforts will most certainly have a leg-up on other sellers.
At the pivotal moments when buyers put you in the hot seat, you’ll need the right answers to a variety of their questions. They’ll want to know about your merchant account, payroll, and a wide range of financial data, all of which you can confidently address with numbers and documentation.
But, what if it comes time to answer questions about your marketing efforts? Will you be prepared to defend your brand and prove that they’re buying more than just a strong bottom line?
We’ve developed a comprehensive marketing guide for your long-term exit strategy. It outlines the 5 marketing tactics you can use now to build enterprise value year after year. Because nurturing your online reputation and building your brand with longevity puts loyal customers in your corner and could be the tipping point for a successful sale.