"Are your Marketing Efforts Giving you the right ROI?"

The ROI (Return on Investment) is simple, amount and efforts invested against the profits earned of course the duration matters. It straight away points to the growth of sales. The formula to calculate the ROI on Marketing Initiatives = Sales Growth – Marketing Costs. eg. If sales grew by 1 Cr and marketing cost is 10 Lacs then ROI is 1Cr /10 Lacs = 10%. ROI is as important as the business itself and digital marketing is providing tools to measure the success of each online marketing campaign.

The simplest way to measure the returns are in the money growing and are the profits increasing, are the expenses on marketing paying off in a specific percentage over a period.

The returns on certain marketing initiatives like SMS Marketing are quicker than the conversion from trade shows, also depending on the product. Measuring the ROI needs more than the formulas ie. the knowledge of when to measure the ROI, finding what influences the ROI, time for lead conversion, length of revenue cycle, investment per lead metrics, single attribution or attribute across programs (single event or multiple events conducted)

E.g. Marketing Initiatives are budgeted say 10,000 per month and the sales generated are worth 50,000 per month than in general can be considered profitable but business costs like brand building, brand awareness, reach penetration etc. attached to sales proportionately affect the ROI.

Find what is missing or obstructing you from drawing better ROI.

1. Find out whether the target audience is correct, the e-mail has relevant content, the links mentioned really work and are there something called “Call for Action”. E.g. 1. Your e-mail campaign is a success in terms of reaching the inbox and being read and yet people are not clicking the say registration link, that’s what is missing. E.g. 2. If conversions have increased just to 50 per month and the growth is stagnant it seems growing at a slow pace but in reality, you may miss the seasonal or occasional opportunities if so for your product or service then this is what you are missing on.
2. Your marketing initiatives may bring you varied results but those which bring none should be eliminated from the marketing strategy. E.g. In UK Promotion of limited-edition Dove body wash for female what went severely wrong is the packaging that had soap bottles that compared with women’s figures to largely shapeless. The ROI, in this case, is obviously negative; on top of it, the company had to deal with resolving the issues that rose with such representation.
3. Finding unique ways of marketing is must and if they cost zero nothing like it. Eg. American Express is a great example of ROI as they spend none still are being talked about and searched a lot due to the marketing initiative. It invites guest authors from various sectors to share their business knowledge and insight, making Open Forum which is a collaborative website utterly content-rich and popular on the search engines. Online conversion is possible due to the value they create for the community.

While trying to find out what’s not working you also come across the reports on what’s working which indicates the diversion of funds and efforts in that direction.

E.g. 1. Royal Bank of Canada achieved an 18% improvement in customer satisfaction after implementing a social customer care system which was integrated along with the traditional call center applications.

E.g. 2. Shashi Exports P. Ltd., Bangalore, India’s biggest garment export firm trained the workers for career enhancement. This nine-month program yielded 250% of the net return on the investment in training.

If the expected ROI of your business is 2.5 times the investment in marketing, you can surely work to achieve that.

Being deserving of better ROI is insufficient without commitment. Trace the pros and cons of your existing marketing initiatives and strategies to modify the method or target.