How Do You Measure ROI?
ROI stands for return on investment. Marketing ROI is measuring the return on investment from the amount you spend on marketing. It is used to determine the return of a specific marketing strategy, or your overall marketing plan.
Marketing is a significant expense for most companies, and you want to know what you're getting for it. Knowing your ROI helps prove that marketing does indeed have an impact on the profitability of the company.
Good marketing is about delivering customers and sales. Measuring how you're doing keeps everyone accountable for using marketing funds wisely. Your Marketing Return on Investment (MROI) helps you to think about and justify every dollar before it's spent.
Ok...Now that I've had my nerd moment...
When it comes to figuring out how to calculate return on investment, the challenge lies in identifying and tracking all of the variables that can impact your results.
There are 2 main things you can do to help with measuring your ROI
An analytics review is simply the process of going through the actual numbers and metrics to see what is happening. Often, we hear acronyms like ROI, PPC, CPL, CPC, CPD, CPQC, CPA, CPO, LV, etc.
It's like alphabet soup! Not all metrics matter. The only thing that matters is what is relevant to your goal. Often, marketing companies will overwhelm you with data that doesn't help...it just looks good.
Marketing plans are one thing that often get missed as we work in the day-to-day of the business. A strategic marketing plan is like a GPS. It is designed to get you from where you are to where you want to be in your marketing.
Just because you're doing something doesn't mean you're doing the right thing. It also doesn't mean that it's getting you any closer to reaching your end-goals. By creating and implementing a strategic marketing plan, you have a map to work from.