There are many factors and variables that affect consumer purchasing behaviors, which makes it difficult for you to track your marketing ROI. Consumers are bombarded on a daily basis with different marketing messages, from many different sources. They may see your ad on TV, online, on a billboard, or hear an ad on the radio. Because of the variety of touchpoints, it makes it difficult to measure exactly where the ad was first noticed that encouraged a conversion. Consumers may remember your brand, but may not be able to recall where they saw your ads.
There are three major factors that affect consumer purchasing behavior and create difficulty when measuring marketing ROI: cultural, social, and psychological.
3 Major Factors Affecting Consumer Buying Behavior
1. Cultural Factors
According to Marketing 91, cultural factors such as values, perceptions, social class, and sub-cultures all affect consumer purchasing behaviors. Cultural factors become the foundation on which our purchasing needs and wants are built. As a business owner, tuning into marketing shifts, consumer needs, and demand increases is critical for success and directing marketing campaigns. However, because of the influence and blending of each cultural factor, it can prove difficult to measure or track ROI when there are so many variables to consider.
2. Social Factors
Within each culture, subcultures exist that contain social groups — groups with shared values. Subcultures can be categorized based on religion, nationalities, ethnicity, age, or shared geographical location. People belong to one or more social groups within a subculture and are influenced by other group members’ values, buying behaviors, education levels, income levels, and careers. Purchasing behavior based on social factors can create a complex web of variables that need to be sifted through in order to market effectively (segmentation) and measure marketing ROI as accurately as possible.
3. Psychological Factors
Psychological factors that influence consumer buying behavior include motivation, perception, beliefs and attitudes. Every person has different levels of motivation when it comes to making purchases. These levels may be based on wants and needs — psychological, social, and biological. Once a need becomes urgent, motivation to purchase increases. Perception, beliefs, and attitudes also motivate consumer buying behavior as a person may perceive a brand or product as meaningful, and these beliefs will motivate buying behavior to reflect the attitudes of the consumer towards different brands and products.
With so many variables involved in consumer buying behavior, measuring marketing ROI can be quite challenging.
How to Measure Marketing ROI More Effectively
In order to measure ROI more effectively, it’s important to determine what variables and outcomes are most pertinent to your business.
Create KPIs to Track Each Variable
Key performance indicators (KPIs) use quantifiable metrics to determine performance over time. These metrics must be customized to your business and goals. Impact Branding and Design suggests considering tracking the following KPIs:
- Sales Revenue
- Cost Per Lead
- Customer Value
- Inbound Marketing ROI
- Traffic-to-Lead Ratio
- Lead-to-Customer Ratio
- Landing Page Conversion Rates
- Organic Traffic
- Social Media Traffic and Conversion Rates
- Mobile Traffic, Leads, and Conversion Rates
Determine What Conversion Means to You
A conversion is a measurable and desired action taken by a customer. Some examples of conversions include a click, submission of a form, a download, a sale, or opening an email. You need to decide what counts as a conversion for your business and how you measure these variables.
Create Specific Goals
Creating specific goals will not only help you determine the direction of your business but will also help you determine successful ROI when analyzing previous campaign results against your goals. To measure ROI, consider analyzing past campaigns then creating a benchmark for success based on your findings. Also, be consistent with your tracking methods. Stay connected with your customers by analyzing how they are connecting with you online, what they are doing each time they connect, and asking them how you can improve. This will help you to improve customers’ buying experiences and optimize future campaigns.
Measuring marketing ROI doesn't have to stop you in your tracks. Understanding the three factors that influence consumer buying behavior, choosing quantifiable variables to measure, defining conversions for your particular business, creating specific goals, and analyzing past performance should help solidify your marketing campaign and provide you with a firm foundation to measure your marketing ROI.