Getting max return from your marketing efforts is a key driver for marketing managers. And, it’s becoming complex with so many marketing channels to manage. Measuring the right metrics is essential if you want to improve marketing ROI as they will help you see what’s working and what’s not so that you can focus your time, attention and budget accordingly.
From our experience running successful marketing campaigns for eCommerce and lead generation, we wanted to share our knowledge to help you ensure your marketing strategy is on the right track and that your marketing tactics are working for you.
Calculating Marketing ROI
Before we measure marketing ROI, we need to know how to calculate marketing ROI. The calculation is simple and goes like this:
(Total Revenue – Marketing Investment) / Marketing Investment x 100
Subtract the initial investment from your total revenue from that channel (which equals the net return), then divide this number (the net return) by the cost of the investment. To get a percentage multiply this figure by 100.
As you can see, it’s a straightforward calculation, and there are plenty of online tools like this one that will calculate ROI for you in a matter of seconds. (we use it all the time).
Improving Your Marketing ROI
As we move through this post, we’ll go into more detail about each of the suggestions on our 10 point marketing ROI list. If you need a quick overview and some inspiration, here’s our top 10 list in brief. Write it down, or make a note, so you have it to refer back to for future digital marketing campaigns.
- Use marketing automation tools
- Focus on customer lifetime value
- Review your marketing processes
- Compare ROI across different marketing channels
- Use data to optimise your marketing campaign
- Reduce your marketing costs
- Sell more to existing customers
- Upskill yourself or your team to the latest standards
- Outsource work to a specialist marketing agency
- Use artificial intelligence for data crunching and manual work
In-Depth Marketing ROI Checklist & Tips
So, we’ve briefly listed 10 points above that will help to increase marketing ROI. Now let’s dig a little deeper and explore each point in more detail and some practical steps to increase your marketing return on investment.
1. Use marketing automation tools
If you work in a small marketing team, marketing automation tools will be your new best friend. From scheduling social media posts to website backups and more, automation in marketing is valuable and here to stay.
Our favourite marketing automation tool is Heropost. This fantastic platform allows you to schedule social media posts across different campaign channels and view your top posts and target audience stats.
With social media being essential in your marketing mix, it makes sense to use a tool that will help you increase social media followers by automating your posts, reducing your workload and allowing your team to focus on other areas.
2. Focus on customer lifetime value
While there are plenty of vanity metrics, customer lifetime value is not one of them. In fact, this metric takes a longer-term view of your customers and will give you a true marketing ROI per customer.
For example, you may have generated some customers through a Google Ads campaign. It cost £5 to acquire one customer, and they spent £20 on their first purchase. That a 4x ROI! However, if that customer goes on to make three more £20 orders by coming directly to your site, then their lifetime value is £80, and that’s a 15x ROI.
3. Review your marketing processes
One way to improve marketing ROI is by looking internally at your own marketing processes. Often in bigger teams or teams working remotely, there can be gaps in processes that mean campaigns are not optimised as they should be – impacting your ROI.
Our suggestion is to document all of your processes and make a point to review them bi-yearly or yearly. This will help to catch issues and is an opportunity to improve or update processes if you have new staff or software.
4. Compare ROI across different marketing channels
The ROI of a Facebook campaign vs LinkedIn, Google Ads and traditional marketing can be very different. That’s why it’s crucial to compare marketing ROI across channels to see which ones are working best for your company.
The best way to do this is by using a marketing mix model, which will give you an overview of how each channel contributes to your sales and ROI. This is helpful information to have when planning future campaigns as you can invest more in the channels that are working well for you and less in the ones that are not.
5. Use data to optimise your marketing campaign
One of the advantages of digital marketing is that you have access to data that can help us improve our campaigns. You can use this data to understand how people interact with your content, where they are coming from and more.
Knowing this will impact your ROI because you will better understand what is and isn’t working. You can then use this data to optimise your campaigns – increasing the ROI.
6. Reduce your marketing costs
Sometimes, you need to reduce your marketing campaign costs to get a good marketing ROI. One way to do this is by negotiating better deals with your suppliers or reducing the amount you are spending on paid advertising.
Another way to reduce your marketing costs is by outsourcing some of your marketing activities to a specialist agency. This can be a cost-effective way to get high-quality work done without breaking the bank.
7. Sell more to existing customers
Acquiring new customers can be expensive and time-consuming. A great way to increase marketing ROI is by selling more to your existing customers and focusing on customer retention. This can be done by upselling or cross-selling products/services that complement what they have already bought from you.
It can also be done by simply providing excellent customer service so that they are more likely to come back and buy from you again in the future.
8. Upskill yourself or your team to the latest standards
The marketing world is constantly changing, and what worked ten years ago may not work today. To stay ahead of the curve, it’s vital to keep up-to-date with the latest marketing standards, whether through attending conferences or taking online courses.
If you’re a business owner, it’s also important to make sure your team are upskilled. This will help them create better campaigns, increase ROI and be more adaptable to changes in the market.
We regularly encourage our team to complete Google’s free online qualifications, and we have marketers that have trained with the Chartered Institute of Marketing.
9. Outsource work to a specialist marketing agency
As we’ve mentioned before, marketing is a complex field with many different aspects. Specialist marketing agencies have teams of experts in each area to help you reach your goals and improve your marketing ROI.
A good marketing agency will have a solid understanding of the latest trends, technologies and best practices. They will also offer impartial advice on what will work best for your company.
If you want to achieve your business goals by increasing marketing ROI, we suggest getting in touch with our team of experts today.
10. Use artificial intelligence for data crunching and manual work
Artificial intelligence can help you with several marketing tasks, including data analysis, social media monitoring, lead generation and more.
This is useful because it can free up your time so that you can focus on other tasks such as planning your campaigns, creating content or working on your marketing strategy.
It can also help you improve your marketing ROI by giving you access to insights you wouldn’t have otherwise.
As you can see, there are several ways that you can improve your marketing ROI. By increasing social media followers, focusing on customer lifetime value, reviewing your marketing processes and using data to optimise your campaigns, you can ensure that your marketing budget is working hard for you. And, by reducing your marketing costs and selling more to existing customers, you can make your marketing efforts even more profitable.
So, what are you waiting for? Start implementing these tips today and see how your marketing ROI improves!