Ask most business owners what they spend on marketing and they will give you a figure to the pound. Ask what that spend earns back and the answer gets vague. There is a sense that more enquiries are coming in, the website looks busier, the agency report had a lot of green arrows on it. But the line between money that is working and money that is keeping people busy stays blurry, and it stays blurry for years.
That blur is expensive. It is the difference between an SME that grows on a marketing budget half the size of a competitor’s, and one that pours money into reach and wonders why the bank balance never reflects it.
You do not need a dashboard or an analytics qualification to clear the blur. You need to ask a few honest questions and refuse to be fobbed off by the answers.
Start at the end, not the channel
The mistake almost everyone makes is judging marketing channel by channel. Facebook did well this month. The newsletter open rate was up. Impressions on the display campaign hit a record. None of that tells you whether the spend is working, because none of it is the thing you actually wanted.
You wanted customers. So judge the spend by the customers, and work backwards.
The single most useful number an owner can hold is cost per acquisition: total marketing spend in a period divided by the number of new customers it brought in. Not leads, not clicks, not “engagements”. Paying customers. If you spent twelve thousand pounds across everything last quarter and gained sixty new customers, your blended cost per acquisition is two hundred pounds. That is a number you can actually reason about.
Now put it next to two others. What is a customer worth to you over the life of the relationship, not just on the first sale? And how long does it take you to earn the acquisition cost back? An owner who knows those three figures, even roughly, can make almost every marketing decision that matters. An owner who knows none of them is guessing, however confident the monthly report sounds.
The vanity metrics to ignore
Plenty of numbers go up reliably and tell you nothing about whether you are better off. They are worth naming, because a lot of marketing spend is justified by them.
- Impressions and reach. These measure how many times something was shown, not whether it changed anyone’s behaviour. Reach is the easiest thing in the world to buy and the least connected to revenue.
- Follower counts. A larger audience that does not buy is a larger audience that does not buy.
- Open and click rates in isolation. Useful for tuning a specific email, useless as evidence the channel earns its keep.
- “Brand awareness”, measured by nothing in particular. Real brand strength shows up in pricing power and shorter sales cycles, not in a slide that says awareness is rising.
The test for any metric is simple. If it went up and your revenue, your retention, or your cost per acquisition did not move, the metric was decoration. Stop paying for it to go up.
The questions that cut through
When you next sit in front of whoever runs your marketing, internal or external, three questions do most of the work.
First: which spend, specifically, can you trace to paying customers, and which can you not? An honest answer will admit that some cannot be traced. That is fine. What is not fine is treating untraceable spend as if it were proven.
Second: what would we stop if the budget were cut by a third tomorrow? The answer reveals what the people running it actually believe is working. If everything is described as essential, nothing has been measured.
Third: what is our cost per acquisition doing over time, and why? A figure drifting upward quarter on quarter is the early warning that a channel is tiring or the market is getting more expensive. It is far cheaper to catch that in the numbers than in the year-end accounts.
The honest version of this conversation is uncomfortable, because it usually surfaces that a meaningful slice of spend is buying activity rather than customers. That discomfort is the point. It is also where the money is.
When you cannot get a straight answer
Sometimes the problem is not the spend, it is that nobody senior is holding it to account. A freelancer optimises the channel they were hired for. An agency on a project reports on the project. Nobody is sitting above all of it asking whether the whole budget, taken together, is making the business money.
That is the gap we are usually brought in to fill. With Fractional Communications Director, a senior partner sits at your table and treats the marketing budget the way a finance director treats cash: every line earns its place or it goes. Not more activity. Better-judged spend, and the numbers to show for it.
You can run the test above yourself, today, with no one’s help. Most owners who do are surprised by what they find. If the answers are murkier than you would like, let us have a conversation.