By: Rianne Hunter
The most important scale for determining marketing performance is your return on investment, or ROI. However, it can be very easy to make mistakes and steer a campaign off course. Try out these ideas to ensure that you have an accurate picture of your campaign.
1. Accurately Calculate your ROI
This point may seem obvious, but it’s easier than you may think to make a significant error in calculating ROI. Some even argue over whether we can really get ROI right. On a basic level, ROI is calculated by the following formula:
(Return – Investment)
(Read: the difference between return and investment, divided by investment.)
However, it is important to consider return in terms of profit rather than gross revenue—be sure to subtract any overhead or production cost. Failing to do this can severely skew your perspective on the success of a marketing campaign.
2. Evaluate Each Piece of Your Strategy
Running a business entails many costs, and often marketing seems like an easy place to make significant cuts. Instead of making broad cuts across the board, seriously assess each piece of your campaign. Consider the effect of cutting expensive video ads which produce limited results, while keeping a successful yet relatively cheap direct mail campaign. This would be a much better use of your team’s efforts than equally slashing both elements of the campaign.
3. Marketing is a Long-Term Investment
As a measure of performance, ROI should constantly be monitored and reevaluated. However, the long-term outlook should be considered before any quick decisions are made. Any marketing campaign may take time to catch on and spread organically—”lightning in a bottle” situations are indeed rare. Think of marketing as any important financial investment your business is involved in, and react to your assessment of ROIs accordingly.
4. Customize the ROI Formula for Yourself
While it’s important to consider accuracy in calculating an ROI, you can make modifications to the basic formula to further provide relevant information. This can include factors such as evaluating the overall profit brought in by return customers over time, or separating out individual overhead costs. Either way, you ought to ensure the overall formula remains intact.
5. Try an ROI Calculator
As you plan changes or consider alternatives, it can be difficult to constantly re-check potential ROI. Improve your efficiency by trying out one of the many ROI calculation tools available online.
With these tips in mind, you’ll be well on your way to getting a better picture of your ROI, and with it, your marketing success.
Rianne Hunter is an independent writer from Southern California. She is a mother of three who loves spending time with her family, and who is interested in all things business, technology, and blogging.