Ensure your marketing efforts are on track and profitable
ROI – it’s likely a term you’re familiar with, but how it relates to your firm’s marketing efforts can be a grey area. Sometimes marketing outcomes aren’t as tangible or straightforward as an instant sale that can be attributed to an ad campaign, and often the time you spent working on it isn’t accounted for. While marketing is a crucial element in business growth, without looking at marketing ROI (MROI), it’s almost impossible to know where to best channel your efforts. Here’s everything you need to know about the benefits of MROI to inform your marketing efforts, what returns and investments you should be tracking and how exactly to measure them.
What is MROI?
MROI involves tracking the money your firm spends on marketing campaigns against the revenue generated by these campaigns. The goal of MROI is to make more than a dollar of revenue for every dollar you spend.
Defining ‘returns’ and ‘investments’
To measure MROI, you need to have a clear picture of what returns you’re seeking from your marketing efforts and what success looks like. This can vary hugely depending on your firm’s goals but can include things like:
- New client acquisition
- Incremental sales from existing clients
- Duration of engagement – for example, time spent on a website or engaging with your content
- Lead generation
Your investment in achieving marketing goals extends far beyond the cost of placing an advertisement. Be sure to account for costs such as:
- Time that went into creating a campaign
- Production expenses
- Any paid analytics tools used
How MROI should inform your marketing efforts
Given that the core purpose of marketing is to increase revenue, measuring MROI will help you determine the success of your strategy and which elements of your marketing efforts are most effective. The benefits of tracking MROI include:
- Allocating marketing budgets – by understanding revenue generated from different campaigns and marketing channels, you’ll gain a clear picture of where to best allocate your marketing budget.
- Justifying spend – marketing budgets are often viewed as superfluous or ‘nice-to-haves’, but hard data (MROI) to support the spend validates the direct and tangible impact it has on the bottom line.
- Measuring campaign effectiveness – analysing the success of individual marketing campaigns allows you to adjust your efforts accordingly. It also provides a valuable baseline to forecast what can be expected from future campaigns.
From unique promo codes to powerful web analytics and CRM systems, it’s easier than ever to correlate money spent and revenue generated. But with so many analytics tools to hand, it can still be confusing. The simplest way to calculate the ROI of a marketing campaign is to look at sales growth during the period of the marketing activity, subtract the marketing costs and then divide this by the marketing cost.
(Sales growth – marketing cost)/marketing cost = % ROI
However, it’s rarely so simple, and typically you’ll have multiple marketing activities running simultaneously. It’s important to look at each at a standalone level to determine what’s working well for your firm. That’s why BOMA has created specific ROI calculators for different marketing activities:
Content writing ROI calculator considers the number of content pieces you write each month, the time you spend creating this content, any outsourcing costs involved and the time and money spent on sourcing images.
Social media ROI calculator considers the number of times you post on social each month, the time you spend crafting your social posts, any outsourcing costs involved, the time and money spent on sourcing images and social media marketing software costs.
Email ROI calculator considers the number of emails you send each month, the time you spend writing and sending these, any outsourcing costs involved, the time and money spent on sourcing images and email marketing software costs.
Make it measurable and targeted with MROI
Implementing and tracking a ratio will provide a golden metric for all of your marketing activities. It will take the guesswork out of the equation, allowing you to stay focused on the desired outcomes while continuously tweaking and improving your efforts along the way. This measured approach will ultimately deliver the best return on your marketing dollar.
Are your marketing efforts not quite getting the returns you’d like? BOMA can swing the ROI balance in your favour by placing a vast content library, templates, scheduling tools and analytics at your fingertips. Find out how.