Are you wondering how to measure ROI for marketing?
ROI (return on investment) is a financial metric used to measure the gain of a return from an investment. It is the measure of an investment’s profitability.
Businesses create marketing campaigns to increase sales, raise brand awareness,
attract consumers' attention, and draw in new customers. Each marketing effort a business puts forth has its own goal: to provide a return on the investment.
Every type of marketing campaign, whether it is PPC advertising, SEO, email, or anything in between, is strategically planned to provide a company with the best return possible. These campaigns are designed to deliver results that increase a company’s bottom line. To measure the effectiveness of each campaign, companies use a specific formula. This formula calculates the campaign’s ROI, determining the streams and efforts that provide the most returns.
At GrowthGenius, we work with companies to build prospecting strategies specifically tailored to their needs while providing them with the best ROI possible. We help them measure their ROI, improve their sales processes, and discover new customers.
So, how do you measure your ROI for the money you are spending? Here’s what you need to know.
The easiest way to calculate the ROI of a marketing campaign is to take a look at the overall sales growth from that campaign, subtract the costs of the marketing effort(s), and then divide by the cost of the marketing:
Sales - Cost of Marketing / Cost of Marking = Return on Investment.
To measure the long-term success of a marketing campaign and the ROI from each campaign, you must collect data to compare your returns. The data to compare your returns to are the sales that occurred before the launch of the new marketing campaign.
That said, marketing campaigns are not just sales-driven. Other forms of marketing increase a brand’s visibility. These campaigns can include social media campaigns and email newsletters and have soft metrics like social media likes, repeat interactions, user engagement, social shares, etc.
You can use different methodologies to calculate and measure ROI, including single-touch attribution and multi-touch attribution.
Attribution is the process of assigning weight to a touchpoint along a consumer’s journey.
Remember: customers interact with businesses in many ways - whether it be through an online advertisement, social media, through a friend, or anything in between. Most customers do not purchase from businesses the first time they come across the business - they do their research, look at what competitors offer, and educate themselves on making the best purchase decision possible.
When it comes to measuring marketing ROI, the touchpoint at which the customer made the purchase decision plays a significant role in the marketing channel’s ROI.
The single attribution model is the easiest to calculate. It accounts for the first or last touch a customer made before making a purchase decision. This model can lack accuracy because it does not take other touchpoints into account - touchpoints customers made with a business along the way that influenced their purchase decision.
For example, in single-touch attribution, a blog post that a customer visited before converting will receive credit for the conversion. Similarly, if a blog post is the last interaction a consumer has, the blog will receive credit for the conversion.
The multi-touch attribution model assigns weight to every touchpoint a consumer visits before converting. This is advantageous because it allows you to record each touchpoint that led to the conversion and the touchpoints that introduced the customer to the product and the one that eventually converted them.
To make the most of your marketing efforts, it is critical to know how to measure the results to improve on and enhance current strategies for future campaigns. ROI is the most vital metric to measure for business and sales growth when it comes to results. At the end of the day, increased sales determine your ROI - if you do not see results after a few months or an extended period, it may be time to change up your strategy.
To accurately measure the ROI of a marketing campaign, you must have a clear marketing measurement strategy that outlines the strategy’s goals and identifies the costs of the campaign. Are you ready to take control of your marketing campaigns and produce results that last?
Are you wondering how to measure ROI for marketing campaigns? Accurate measurement of marketing ROI is vital to a business’s success. Find out how GrowthGenius can help improve your marketing strategies and increase your ROI.
You can also try out our ROI calculator here.
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