How to Prove the ROI of Your Marketing: Templates, Tips and Best Practices

As a marketer, you know that driving awareness, engagement and revenue for your business is no easy feat. It takes a lot of strategic planning, creative execution and hard work to get results. But even when the results are there, getting the recognition (and budget) you deserve from executives and stakeholders isn‘t always a given.

That‘s because the C-suite doesn‘t just want to see output metrics like clicks and impressions – they want to see outcomes in terms of pipeline and revenue. They want to know that every dollar invested in marketing is generating a positive return. In other words, they want you to prove the ROI of your marketing efforts.

Sounds straightforward enough, but in reality, tying specific marketing activities directly to revenue is a major challenge. With long B2B sales cycles involving many touchpoints and decision makers, figuring out which marketing channels and campaigns had the most impact is no simple task.

But cracking the code on marketing ROI is well worth the effort. Studies show that marketers who can calculate ROI are 1.6 times more likely to receive higher budgets (Hubspot). And 70% of executives say they would increase marketing spending if marketers could better prove ROI (Forbes).

The good news is, with the right approach, tools and metrics, proving the business value of your marketing is absolutely possible. In this comprehensive guide, we‘ll walk through everything you need to know to become a marketing ROI master, including:

  • The marketing metrics that matter most for proving ROI
  • How to use Excel templates to calculate marketing ROI
  • Tips for creating compelling ROI reports and dashboards
  • Real examples of how companies are demonstrating marketing ROI
  • Best practices for improving ROI over time

Buckle up, because by the end of this post, you‘ll be fully equipped to show your marketing team‘s revenue impact and get the kudos you‘ve earned. Let‘s dive in!

Marketing Metrics That Matter for Proving ROI

Before you can calculate and prove ROI, you have to be tracking the right metrics to feed into that calculation. Vanity metrics like social media followers, video views or email open rates can be useful to track for engagement and brand-building. But on their own, they aren‘t enough to show business impact.

To truly connect the dots between your marketing activities and bottom-line results, you need to focus on metrics that reflect the entire buyer‘s journey and ultimate conversion to revenue. Here are some of the most important:

Leads and Lead Quality

Generating new leads is one of marketing‘s most essential jobs, so tracking lead volume is a must. But it‘s not just about quantity – quality matters too. Work with your sales team to define what makes a "marketing qualified lead (MQL)" in terms of demographic and firmographic traits, behavioral signals and scoring thresholds. Then report on what percentage of leads being passed to sales meet that criteria.

According to Implisit, Lead qualification has the biggest impact on revenue, 5-10X greater than the number of leads(https://www.heinzmarketing.com/2015/02/leads-vs-quality-leads/).

Lead-to-Customer Conversion Rate

Taking qualified lead tracking a step further, you‘ll want to measure what percentage of marketing-generated leads actually convert to customers. If a high volume of leads are qualified but few ultimately close, that could indicate lead quality issues or sales process gaps. According to FirstPageSage, the median lead-to-customer conversion rate is 4%, and the top 25% of companies convert at 5.6% or higher(https://firstpagesage.com/seo-blog/seo-industry-insights/whats-good-lead-customer-conversion-rate/).

Cost Per Lead and Cost Per Acquisition

Efficiency is just as important as volume and conversion rates when it comes to ROI. To ensure your marketing spend is being put to good use, track how much it costs to generate each lead (cost per lead) and each new customer (cost per acquisition). Benchmark your costs against industry averages – for B2B SaaS, for example, the median cost per lead is $36 to $72, and cost per acquisition averages $941(https://www.leadfeeder.com/blog/b2b-saas-lead-generation/#:~:text=When%20we%20looked%20at%20the,generally%20range%20between%20%2436%E2%80%93%2472)

Customer Lifetime Value

Acquiring a new customer is great, but how much are they really worth? Customer lifetime value (CLV or LTV) projects the total revenue a customer will generate over the course of their relationship with your company. Increasing average LTV means your customer base is becoming more valuable over time. Studies show that increasing customer retention by just 5% can boost profits by 25-95%(https://hbr.org/2014/10/the-value-of-keeping-the-right-customers).

Marketing-Influenced Pipeline and Revenue

With a complex B2B sales process, a single lead or deal is often influenced by many marketing touchpoints over time. That‘s why it‘s important to measure marketing-influenced pipeline and revenue, not just leads where marketing was the original source. Using multi-touch attribution models, you can assign proportional credit to each marketing interaction and understand marketing‘s holistic impact. A Bizible study found that marketing influences 52% of pipeline revenue on average(https://www.bizible.com/blog/multi-touch-attribution-infographic).

There are many other important marketing metrics to track like brand awareness, site traffic, and content engagement. But when it comes to hard ROI, these pipeline and revenue-focused metrics are your most critical.

How to Calculate Marketing ROI in Excel (+ Free Template)

Now that you know which metrics to track, it‘s time to actually crunch the numbers and calculate ROI. The basic formula is simple:

(Revenue Generated by Marketing – Marketing Expenses) / Marketing Expenses = ROI

But of course, figuring out how much revenue should be attributed to marketing is the tricky part, especially if you have a long sales cycle with many touchpoints. That‘s where multi-touch attribution comes in.

There are several attribution models you can use, such as:

  • First touch – 100% credit to the first marketing interaction
  • Last touch – 100% credit to the last marketing touchpoint before opportunity creation
  • Linear – equal credit to each touchpoint
  • Time decay – increasing credit to touchpoints closer to opportunity creation
  • Position-based – 40% credit each to first and last touches, with the remaining 20% split across intermediate touches

To make attribution and ROI calculations easier, we‘ve created this free Marketing ROI Calculator Excel Template. Here‘s how to use it:

  1. Input your company details like average sales cycle length, target cost per lead and acquisition, and total marketing budget.
  2. Enter counts for your key funnel metrics – visitors, leads, opportunities, customers.
  3. Add attribution percentages for each of your marketing channels (email, paid search, etc.). You can use different attribution models on different tabs.
  4. The spreadsheet will automatically calculate key metrics like conversion rates, cost per lead and acquisition, and total ROI.

Marketing ROI Calculator Excel Template

You can also create visualizations of your ROI data right within Excel. For example, a stacked bar chart showing conversion rates from lead to opportunity to customer:

Bar chart showing conversion rates from lead to opportunity to customer

Or a pie chart breakdown of your marketing budget by channel:

Pie chart showing marketing budget breakdown by channel

Feel free to customize the spreadsheet with your own data, metrics and visualizations. The key is having one central place to input your data and calculate ROI on an ongoing basis.

Tips for Building Compelling ROI Dashboards and Reports

While an Excel spreadsheet full of data is great for in-depth analysis, it‘s not the most engaging format for communicating ROI to executives and other stakeholders. That‘s where dashboards and visualizations come in.

A well-designed ROI dashboard should focus attention on the most important metrics, show trends over time, and make insights pop with easy-to-digest charts and callouts. Here are a few examples of effective ROI report visuals:

Pie chart showing marketing sourced revenue broken down by channel
*Pie charts are great for showing the portion of a whole contributed by each channel, in this case what percentage of revenue is driven by each channel.*
Funnel chart showing conversion rates from leads to MQLs to opportunities to customers
*Funnel charts help visualize drop-off and conversion rates at each stage of the buyer‘s journey. They‘re a mainstay in any good ROI report.*
Line chart showing decreasing cost per lead trend over time
*Line charts are perfect for showing how key metrics like cost per lead, cost per acquisition or average deal size are trending over time.*

In addition to static Excel charts, you can build interactive dashboards that allow viewers to filter different dimensions, zoom in on a time period, or drill down to the specific campaign or channel level. Tools like Tableau, Domo, Databox and Grow make it easy to pull in disparate marketing data and create polished dashboard reports.

Whichever reporting method you choose, the keys to a high-impact ROI dashboard are:

  1. Tell a clear story: Organize your dashboard in a logical hierarchy with the main takeaways featured prominently. Use headlines and brief captions to spell out insights.

  2. Keep it visual: Let your data viz do the talking. Avoid cluttering dashboards with too much explanatory text.

  3. Make it interactive: Allow viewers to explore the data with filters and drill-downs. This increases data transparency and lets them find their own insights.

  4. Tie back to goals: Always include targets and show progress against them. This provides important context for interpreting the numbers.

  5. Don‘t overload: Resist the urge to include every possible metric. Focus on the critical few KPIs that really indicate marketing performance and impact.

By using templates and following data visualization best practices, you can create powerful dashboards and reports to prove and communicate marketing ROI to your organization.

Real Examples of Companies Proving Marketing ROI

Need inspiration for how to showcase marketing ROI at your organization? Check out how these companies are quantifying and communicating their team‘s impact:

Bazaarvoice Ties Over $8M in Pipeline to Single Content Campaign

Ratings and reviews platform Bazaarvoice wanted to measure the full-funnel impact of a major content campaign called the CGC Index. Using multi-touch attribution reporting, they were able to prove that the campaign influenced over $8 million in pipeline and $4.2 million in revenue, with content touches accelerating deal velocity by 12 days on average.

"Being able to have very specific conversations about exactly how our programs are contributing to pipeline and revenue has completely changed the perception and profile of our team in the eyes of our C-suite," said Alison Kwong, Head of NA Marketing Operations at Bazaarvoice.(https://www.bizible.com/blog/bazaarvoice-case-study)

Centurylink Drives 40% of Sales Pipeline from Digital Marketing

Telecom giant Centurylink relied heavily on inside sales and account-based marketing to drive growth. But they lacked insight into how digital marketing touchpoints were influencing sales opportunities and revenue. After implementing multi-touch attribution, they found that 40% of sales pipeline was driven by digital marketing channels.

This insight allowed them to shift budget and headcount from sales to digital marketing, increasing marketing ROI by 20%.(https://resources.bizible.com/case-studies-centurylink-case-study-request)

Concur Proves Positive ROI Across Every Marketing Channel

Expense management software provider Concur wanted a more complete and accurate picture of marketing ROI beyond just first and last touch metrics. Using a multi-touch attribution model, they were able to show that marketing was influencing 60% of won deals, with a positive ROI across all channels including events, webinars and digital advertising.

"Multi-touch attribution reporting gave us confidence that the money we were spending was driving real business results," said Brian Sipes, Director of Analytics at Concur. "It was a game changer that helped us earn more investment in marketing."(https://www.bizible.com/blog/concur-case-study)

As these examples illustrate, companies in all industries are using advanced attribution and ROI analysis to prove marketing‘s bottom-line impact and make the case for additional resources. By tying each marketing channel and campaign to hard metrics like pipeline and revenue, they leave no doubt about marketing‘s value.

Conclusion

In the immortal words of marketing pioneer John Wanamaker, "Half the money I spend on advertising is wasted; the trouble is, I don‘t know which half." While we may never be able to track every marketing dollar down to the cent, today‘s attribution technology and analytics allow us to get pretty darn close.

By focusing on the right metrics, using ROI templates and calculators, and creating compelling reports and dashboards, you too can connect the dots between marketing activities and business outcomes. No more letting subjectivity and vanity metrics rule the day – it‘s time to become data-driven marketers who can prove our worth.

Remember, this is an ongoing journey, not a one-time project. Regularly tracking ROI will allow you to continuously optimize budget allocation, improve campaign performance and drive alignment with business priorities. Over time, you can test into the right attribution model and mix of metrics for your organization.

The result? Marketing becomes an undisputed revenue driver for the business, and you get the recognition and resources you deserve. So what are you waiting for? Pull up those spreadsheets, polish off your data viz skills and start your journey to marketing ROI mastery today. Your seat at the revenue table awaits.