Before making a business investment you want to know whether you are likely to achieve the results that warrant the spend. Below, marketing consultants, SideKit share how you can ensure your marketing supports commercial viability with return on investment (ROI).  

Have you ever struggled to decide what marketing is best for your business or what is worth the spend? Planning for and tracking ROI is beneficial for business when evaluating what marketing activities deliver real value and are, or as importantly, are not, worth repeating.

Know the return you need.

A good place to start is to determine how much return equates to a viable spend. For example, your business’ marketing activities may need to earn ten times the spend in revenue to bring real return to your business. Meaning a $10,000 spend may need to bring in $100,000 revenue to achieve profit and true ROI. This is a good conversation to have with your finance or accounts advisor.

Some businesses know their average win rate and may base ROI off leads added to the pipeline, while others measure actual revenue generated from the activity. For plumbing companies, this could mean a maintenance focused campaign with faster returns may use revenue tracking, while a project focused campaign may use pipeline tracking.

Not all marketing activities are measured on revenue or pipeline, it will depend on the campaign goals. Other common metrics include landing page visits, email open rates, click through rates, followers, subscribers, form submits, phone calls, and various other forms of conversions. These are good conversations to have with your marketing advisors.

Whatever your metric, it’s important to know the return you want from the start.

Calculate true investment.

Another key component is to ensure all related costs are calculated. For example, when considering a marketing campaign start by building a plan and budget that factors time cost, advertising spend, print, and any other related costs – this may come in the form of a quote from your marketing agency if you outsource.

Factoring all costs provides the true investment value to measure.

Supporting ROI

It’s important to know that marketing can only achieve so much on it’s own and goes hand-in-hand with other business departments. Consider whether your company has the people, systems, and process in place to effectively manage leads and convert sales? For example, if you get a phone lead from a marketing campaign are your customer service team equipped to convert the sale.

Consider the activity beyond the marketing spend to ensure the investment and results are not jeopardised by another factor.

Is it viable?

When you know the return you need, true cost and resource required, this is where more informed judgement calls are made to calculate estimated ROI and decide whether you think it’s achievable or worth testing viability.

Did it work?

At the appropriate intervals during or point after the marketing activity it will become time to monitor and measure ROI. This will be when you determine whether it was worth the spend and something you want to repeat, adapt, refine, or halt.

We hope you see the results you had hoped for!

Don’t be disheartened if you didn’t make the return you had anticipated, a big part of marketing is testing, learning, and continual refinement to improve results and ROI. If it’s your first time, start small and incrementally increase or refine.

“The best investment you can make is an investment in yourself… The more you learn, the more you’ll earn.” – Warren Buffett

Keep up the good work and please don’t hesitate to contact us if your business needs marketing advice - marketing@sidekit.nz