Return on Investment (ROI). Every business leader knows what it is, and knows it’s important, but how many really have put a plan in practice to build a healthy ROI in their marketing?
In this episode, Amy Appleton, VP of Marketing at BELAY, rejoins the podcast to talk about all things ROI. We’ll discuss what a good ROI looks like, how to know when you’re succeeding with ROI, what to do when things go wrong, what type of technology can help and more.
Here are some takeaways we shared:
1. Obtain a healthy marketing ROI.
When you have a healthy marketing ROI, you are not spending more to bring on new business than the new business brings in revenue for you. You do not want to spend more to get new customers or clients than you’re going to make from that business.
Don’t overspend to gain your clients. Depending on what your business looks like, you will have different tolerances for what your healthy ROI is gonna be. It is not a one-size-fits-all question at all.
Ideally, you want to spend as little as possible in order to gain new clients. It also matters what your business size and tolerance is. Is it a one-time cost and are you getting one-time revenue or is it recurring? Are you a tool? Are you having a recurring revenue stream?
You should take all those things into consideration to bring in the mix for what is a healthy ROI.
2. You don't have to be a CEO to understand ROI.
Tracking ROI can be as simple as creating an Excel or a Google Sheet. Start by noting how much you’re spending and what is the value of each transactional client.
Once you have those numbers, you’re set up to start tracking. As your marketing or your business grows and gets more complex, technology can be incorporated to make everything easier.
At the beginning of BELAY, we stuck to tracking in Excel spreadsheets because we didn’t have that many different avenues we were tracking. But when you get more avenues and opportunities and you’re doing more and more, that’s where technology truly starts to help.
3. You often have to be patient in waiting on your ROI.
A common assumption is that if you spend time and money in a certain area, you should see leads or revenue generated immediately.
But there’s a lot of patience involved with marketing, and sometimes it means you won’t reap the benefit of the reward of the effort and the dollars being spent.
There are many marketing efforts, such as speaking events, word of mouth or even sponsored ads, that take time to see the results.
It could be six months before you actually anticipate receiving the ROI back. Although we would like everything to be immediate, unfortunately, it’s just not the way it always works in marketing.
Be patient. Track these efforts on a monthly basis. And pivot when needed.