September 18, 2015 1:15 pm
Return on Investment (ROI) which is most closely associated with the worlds of finance and investment. In the case of marketing, ROI essentially appraises the relative gain – in terms of profit gleaned (or costs saved) – which is gained by undertaking a marketing campaign in comparison to the expenditure related to that campaign.
ROI and Marketing
The above is a basic explanation of the general concept of ROI but as is often the case, in reality things aren’t quite as simple. When it comes to the ROI delivered by marketing activities, it is crucial to first understand that there are many factors which must be considered on both the expenditure and return sides of the equation. Costs associated with marketing activities after all, come in a number of shapes and sizes:
- Creative costs – Expenditure devoted to generating marketing ideas, developing brand identities and deciding and implementing campaign strategy.
- Practical costs – Investment in the physical creation and dissemination of marketing materials, the salaries of those involved in such processes and other similar day-to-day expenditures related to marketing activities.
- Subsidiary costs – Unforeseen expenses and costs related to marketing exploits or changes to business practices as a result of specific campaigns or general marketing advice.
Whilst this is indeed important to understand, and may seem to suggest that achieving good ROI from marketing activities could be more difficult than it first appears, it is even more crucial to realise the diverse and numerous forms which returns from marketing can also take:
- Immediate profits – This is the most obvious and commonly considered type of return gleaned by marketing, and is made up of the physical increases in sales or contracts won as a direct result of any marketing campaign.
- Future business – An unquestionably important aspect of the benefits wrought by marketing campaigns, the potential for future business from customers attracted by marketing activities is often overlooked by many when considering ROI. In a similar vein, recommendations and referrals generated by those new customers also count amongst the returns generated by marketing campaigns.
- Altered perceptions – In many cases, marketing activities may not be explicitly aimed at generating immediate sales but instead at changing people’s perceptions of a company or brand. It is difficult to measure but the future choices made by prospective customers based on their altered perceptions of the company or product can also contribute to the returns delivered by marketing expenditure.
If you want to learn more about marketing that really delivers, the team at Ketchup can help. Contact us today on 0330 088 9277, or complete our online enquiry form.
March 17, 2015 8:45 am
Setting up and running a marketing campaign is often carried out with one or more of the following objectives in mind – increasing enquires and sales, receiving feedback and encouraging customer engagement, and/or getting your brand seen by a bigger audience. However, before your marketing campaign is released, you should have clear expectations of what you want it to achieve. How many enquiries do you expect to get from it? How many of those enquiries would you like to see convert into sales? There’s no point in creating and releasing a marketing campaign if you don’t know what you want from it and have no way of measuring and monitoring how successful it is.
Marketing analytics are so important to the success of businesses these days. Your marketing performance will seriously affect your ROI, whether positively or negatively, so you need to know what you’re doing right and what you’re doing wrong. By monitoring and measuring your results you can work out what your customer’s preferences are and offer your services accordingly. In addition, when you know how well different aspects of your marketing activities are doing, you can spend your marketing budget in the right way. This will save you and your business from spending money unnecessarily.
What can you learn from measuring the response to your marketing campaigns?
Aside from the basics of understanding the levels of ROI from a marketing campaign and identifying what your customers like and where you should spend your money, measuring and monitoring the results of your campaigns can give you specific details that will help you to beat your competitors. For example, it’s important to know what your customers want but it’s perhaps even more important to know the keywords that they use when looking for something that you can offer them. Knowing the most frequently used keywords can help you to position your products correctly, write and distribute compelling content, and speak your customer’s language.
How to start monitoring your campaigns
Unfortunately, nothing really comes for free and the best ways to monitor your marketing campaigns can cost, whether it’s in terms of time or money. There are various ways of measuring your campaigns depending on the channels used. For example, using tools like AdWords and Google Analytics, alongside metrics from your email marketing and social media activity can give you a lot of useful information about campaign performance and customer behaviour. The results from these tools, if used correctly, can help you to increase the effectiveness of your campaigns, which in turn leads to more awareness of your products and services, as well as increased sales.
An online marketing campaign can potentially reach thousands, even millions of people thanks to our ability to instantly share with family and friends via social networking platforms, email, and other media. This means that getting it right is vital to existing and future business and measuring and monitoring individual and collective campaign performance is a huge part of finding out what works and what doesn’t. Take the time to analyse the information that your campaigns give you and there should be no reason for not seeing a great financial return.
If you are looking for help with your marketing audit, or a specific marketing campaign, whether it’s email, PPC, or online advertising, the experts at Ketchup are here to help. Contact us today on 0330 088 9277 or complete our online enquiry form.