How To Measure Marketing ROI: A Guide For NZ Business Owners

Measuring marketing ROI starts with a framework that connects your marketing all the way through to revenue. For a business that sells through leads and quotes, revenue can take months to land, so we track pipeline value, which is the dollar value of the qualified work your marketing has put in front of your sales team.

I'm an accountant by trade, and I still read a lot of profit and loss statements. On a P&L, marketing sits in the expenses, and nothing on that page tells you how effective it has been or what revenue it brought in. When you can't link that spend to the revenue it brought in, it's hard to decide what to keep when trading gets tough and cash is tight.

Everything we do at The Launch Agency is commercial first. Pipeline value can only be tracked once the CRM and qualification stages are in place, and since the start of October we've helped 15 brands put that in place and start calculating it. A roofing company has grown its pipeline value from $300,000 to $1 million, and a renovation company's is at $2 million.

This guide covers how we measure marketing for lead generation businesses, why pipeline value sits at the centre of it, and what to do when the market goes quiet. If you'd rather watch than read, the video version is below.

Why Most Businesses Can't See Their Marketing ROI

Most of the businesses we meet don't connect their marketing to the revenue it brings in. They can see the cost on the P&L and the activity in the ad platforms, but they have no way of connecting the two.

Platform numbers such as reach, impressions and cost per lead are easy to find, and they're where a lot of marketers stop reporting. Those numbers show how many people saw an ad or filled in a form. Whether those people were a good fit, and whether any of them bought, only shows up later in your CRM (the system your sales team tracks enquiries in) and your sales figures.

The gap matters more when trading gets tough, because leads still come through but more of those people say, "We're going to hold off until things settle down," or "until after the election." If you judge your marketing on last month's sales, a slow month can make it look as though your marketing has stopped working when it hasn't.

The Five Levels Of Measuring Paid Marketing

We measure paid marketing in five levels, from the numbers inside the ad platforms through to the revenue on your P&L. Each level needs more infrastructure in place than the one before it.

1. Reach and impressions. How many people saw your ads, which is where a lot of marketing reports start and finish.
2. Cost per lead. The entry level, which anyone can see inside Meta or Google once tracking is set up. It counts every form fill, whether the lead is a good fit or not.
3. Cost per qualified lead. This needs a clear definition of what a qualified lead is for your business, a CRM with proper sales stages, and a sales team that uses it every day.
4. Pipeline value. The total value of the qualified work you could win, and the earliest reading on what your marketing will turn into.
5. Revenue. The sales your marketing brought in, which is the number on your P&L and the slowest of the five to show up.

Every lead generation business we work with is moving towards tracking pipeline value. Those with more advanced infrastructure also track contribution margin per service, profit per service and customer acquisition cost.

Why Pipeline Value Is The Number To Run Your Marketing On

If your sales cycle is three months, the revenue you see today came from leads you got three months ago. Pipeline value shows what your marketing is likely to bring in well before it reaches the P&L.

If you track it month over month, it also gives you a number you can take to your board, your shareholders or your business partner to show whether your marketing is working.

The simplest way to work it out is to put a dollar value on every qualified lead, based on the service they're interested in, and add them up. You can also weight each lead by how likely it is to close at its stage of your sales process, so a lead with a quote in their inbox counts for more than one you've only just met.

When a prospect says, "Let's wait until things settle down," move them out of your qualified pipeline and into a nurture sequence of emails, calls and useful content, which is a much longer cycle. If you keep counting them as qualified, your pipeline value stops meaning anything. Every lead also needs a source in your CRM, so you know which pipeline came from your marketing.

Putting The Infrastructure In Place First

Tracking pipeline value relies on a CRM your sales team works out of every day, a clear definition of a qualified lead, proper sales stages and a way to measure the success of your campaigns. For smaller businesses we use GoHighLevel, which doesn't cost a lot to run, and for larger ones HubSpot or Salesforce.

Meta and Google learn from whatever you tell them is a lead, so the same infrastructure makes your advertising smarter. If 80% of your leads aren't qualified and the platform only sees form fills, most of what the algorithm learns from is the wrong 80%, and it finds you more people like them. When your CRM sends qualified leads back to the platforms, they learn who your real customers are and go looking for more of those.

Which Marketing Should Carry An ROI Target?

Performance marketing is built for dollar in, dollar out, and most of the time that means paid advertising on Meta and Google. It carries some brand awareness as well, and it's the most ROI-driven way to win new customers. This is where your measurement framework should be at its tightest.

Brand marketing is measured in revenue over time. It takes longer to show up than performance marketing, so judge it across quarters, alongside the volume of leads and qualified leads coming through and how each customer found you.

What To Do When Trading Gets Tough

If a business owner rang us worried about the market, we'd ask about three things before talking strategy.

1. Your setup. Which CRM you use, which platforms you run, and whether each platform is getting smarter from the leads coming through.
2. Your scorecard. How you measure the success of your marketing today, and which of the five levels you can report on.
3. Your cash flow. How long the business can keep going, which decides the channels you lean on to bring in new business.

The costliest mistake we see in a slow patch is switching marketing off completely. In quiet months, the owners who do best use every channel open to them. We think of six ways to win new customers, building on frameworks Alex Hormozi and others use: organic, paid, warm outreach, cold outreach, referrals and affiliates.

Many owners focus on new leads and overlook the database they already have. If you have 1,000 people in it, a week on the phone with the warmest of them is one of the highest-value things you can do. For the people who say "let's wait," a nurture sequence keeps you in front of them, with touch points over the following months that teach them something useful.

Where To Start

Start with your infrastructure: your CRM and systems, how you qualify leads, and whether you measure any of it. Work on that before you decide which tactic to deploy.

Then work with your marketing partner to put a dollar value on every qualified lead and build a full measurement system, from reach all the way through to revenue. Once pipeline value is tracked month over month, you can base your marketing decisions on the work coming through your pipeline.

FAQ

What is pipeline value?

Pipeline value is the dollar value of the qualified work in your sales pipeline that came from your marketing. It's the earliest reading on what your marketing will turn into.

Why measure pipeline value instead of lead numbers?

A lead count includes every form fill, qualified or not. Pipeline value only counts qualified work, puts a dollar figure on it and shows up months before the revenue does.

Can you measure the ROI of brand marketing?

Brand marketing is measured in revenue over time. It takes longer to show up than performance marketing, so track it across quarters and record how every customer found you.

What should my marketing agency report on?

Your agency should report on every level from reach and impressions to revenue, with cost per qualified lead and pipeline value tracked month over month. A good agency should be able to explain its measurement framework clearly before you sign. Our guide to what a marketing agency costs in New Zealand covers the fees.

Should I stop marketing before an election?

Switching marketing off completely is the costliest mistake we see in a slow patch. Leads still come through before an election, and pipeline value shows you which of them are still in play.

Written by Ben Langton Burnell, CEO and Founder of The Launch Agency.