From a mom & pop store to Cadbury’s…your marketing budget is likely never as much as you’d wish it to be. The budget you invest in your company is a precious commodity and thus you need it to perform and deliver fantastic ROI.
ROI you say? This is the part where most companies stumble. Yes, we had clicks; Yes, we had impressions; Our banner is on a really busy highway; The magazine was distributed to x number of homes….but do we REALLY know the ROI?
The most vital part of any marketing campaign is usually just skimmed over. Measurement should be the first and foremost item you spend your precious time on. This and only this will give you an effective representation if your money is being spent on the correct channel.
It’s hard to know if you’ve won the game if you don’t keep score!
Are you effectively measuring your ad spend?
I’ll run through a couple of items you should be tracking, but let me just state that I am a lover of online media as it’s TRACKABLE! So my post will centre around defining ROI, and I only feel that one can effectively do so online.
Here are 4 things that you should already know about the marketing segment of your business.
- What is the lifetime value of your customer? Do you upsell, cross-sell and offer repeat services or products? This makes your customer a loyal lifelong commitment, not a once off sale.
- What is the exact cost of getting a new customer or client? Do you know how much you’ll spend to acquire one new customer? This goes hand in hand with setting out future budgets as you’ll need to determine what you’re willing to spend to get one new customer.
- What is your cost per lead? (not sale) This you can determine by dividing the cost per sale [as above] between all incoming inquiries/leads.
- What is your marketing cost? This is not purely ad spend but includes graphic design, web development, staff, influencers, PR and other additional expenses that might not be so clear from the start.