How to Measure Marketing ROI
Updated: May 9
Understanding marketing ROI can help you to avoid unknowingly sabotaging effective efforts (which happens more often than you think!), and avoid unnecessary disappointment.
Many assume their marketing efforts are not working, or are not working fast enough, and will stop those efforts too soon, before those efforts have a chance to make a monetary impact. However, those who stop too soon likely feel disappointed because they are not measuring the proper metrics, metrics that will eventually lead to sales.
Marketing ROI misconceptions.
There are many misconceptions about the return on investment that marketing brings. These misconceptions result in businesses sabotaging effective efforts, stopping and starting again from square one, then left with little to no results.
Marketing, when done right, will always bring results. But you have to be sure you are measuring the proper metrics to see what is, and what is not, working so you can adjust and refine your strategy.
For example, you may think more followers on social media result in more sales. But this is not alway the case. They have to be the RIGHT followers. So from the start you need to ensure you have a strategy in place that is attracting your ideal client, those who will eventually buy from you.
If your posts get a lot of likes, you may think this is great and people will surely reach out to buy. But what is the content that they are liking? A better metric to measure is to look at analytics and see if they are taking further action by visiting you profile. Are they clicking the link in your bio to visit your website or sign up to an email list? These are metrics that show prospects are getting warmer and getting closer to reaching out.
Ways to measure marketing ROI?
It’s important to understand that marketing ROI is not measured like typical ROI metrics. Marketing cannot and shouldn’t be measured only in sales. Why? Because marketing and sales are different. Marketing is everything that happens before the sale. Marketing builds awareness of your business and your offer. Marketing attracts your ideal clients. Marketing ROI is measured in many intangible ways, including:
Email Sign ups
Just to name a few.
For example, $5 spent on marketing might not mean you’ll get a $10 return in immediate sales. That $5 might mean you got 10 prospects to sign up to your email list. With a proper email marketing strategy in place, you can continue to nurture those warm leads, and convert them into paying clients.
Another example, from my client who recently increased her email leads from 200 to over 800 in just a few months with one ad, had no immediate sales, yet watching the analytics we could see that she now has a 60% open rate on those emails (while the national average is just 16%). Email marketing also has the highest ROI in marketing. So, we know if we keep consistent, it’s only a matter of time before leads convert into paying clients or make a purchase.
But, if we were to stop her email marketing today “because it’s not working” then over 1,000 leads would forget about her. Warm leads would go cold.
Stopping then starting again months later will erase all that rapport you have built.
Remember, marking is a lot like building a relationship; there is an awareness stage and nurturing stage before prospects will convert into clients. It also depends on what you are selling. It will take longer to convince someone to work with a financial advisor vs a moving company, where the need is imminent.
Getting the sale.
Should these metrics like brand awareness, website clicks, and email sign ups lead to new business, new sales? Of course! But winning over the trust of new prospects takes time as they become more aware of, and warm up to, your offer.
This is why consistency is crucial to the success of your marketing efforts.
Your marketing efforts could capture the attention of a high-ticket lead today, but that lead might not be ready to purchase until six months from now. If you halt marketing efforts now, thinking it's not working, you’ll no longer stay top of mind with that interested prospect, and within those six months that prospect could find and hire someone else who made themselves available.
The journey a prospect takes before deciding to reach out could look something like this:
A prospect finds you on social media, they enjoy your content, and decide to follow. They’ve been watching you for a few weeks now and through your strategic content they realize that you could be a good fit for them and they need your services. But they want more information. So they go to your bio or profile and find your website have listed. They browse your site to get more information but they are not ready to book a call just yet. They have some other projects in the works and will reach out to you once those are complete. Seeing that you have a free resource and email list, they sign up to get more information, and keep you in mind. Things get busy and they have’t had a lot of time lately to spend on social media but they do see your weekly emails coming in. One caught their eye and they see that you are taking new clients and decide to finally book that consultation.
That is marketing success.
This is a typically journey for a prospect. Many don’t buy immediately. Do you? This is why a consistent presence is key to stay in front of your prospects!
Now once they are on the call it is up to you, to close the sale. Marketing did it’s job, now it’s up to you to close the sales call.
If you find it hard to stay consistent, or aren’t sure how to monitor your marketing efforts, perhaps it’s time to outsource to avoid losing potential business. Book a free consultation!