In the business world, ROI (Return On Investment) is a constant concern, for one simple reason: money. When you work in an office environment, the budget and the almighty dollar determine almost everything. If you don’t have the money to do it, then it simply doesn’t get done.
And since businesses spend all this money, they want a positive ROI – they want to know that their investment has been worth it. In areas like IT, this can be easy to figure out. An increase in funding correlates to less days of lost productivity due to tech issues. But in other areas, such as marketing, it can be much murkier. How can you tell if your marketing budget is paying off? How do you know if your spending has been worth it?
We’re here to help you figure it out. Here’s how to determine your marketing ROI in four steps:
Step 1: Figure out where the marketing budget has gone
Another reality of working in an office: the money doesn’t always go where it’s supposed to. With that in mind, now is the time to account for every dime in the marketing budget. Ensure that you only account for marketing expenses, and try to pin down where every dollar went.
Step 2: Account for the man hours
One of the tough parts of determining an ROI is accounting for “man hours,” or for the time that employees have spent working on tasks. Whatever formula you use to determine the hours invested, keep it consistent across the board, and always try to attach a dollar value to it. This isn’t an exact science, so just do your best when estimating a price.
Step 3: Check out the results
Now that we’ve determined how much money we’ve spent and how many hours we’ve invested, it’s time to determine what you’ve accomplished. Here are some marketing-specific goals that you should keep in mind:
Traffic: You don’t want to look for specific numbers, you just want traffic to continuously rise. If traffic is stagnant or even declining (gasp), your marketing isn’t working.
Leads: When traffic comes up, leads should naturally rise as well. However, if your leads don’t seem to be corresponding with the amount of traffic, your content offers are likely to blame.
Social media following: Social media is a critical part of modern marketing, and the bigger your following is, the better. Not only will this give you access to a larger captive audience, it will also provide a great venue for publicizing your content. Your social media following should be growing steadily, across every social platform your business uses.
Total sales: This can’t all be contributed to marketing, but the department certainly plays a big role.
Step 4: Make a determination
So now you know how much work marketing did and what the results were. Time to make a determination on your ROI! Unfortunately, I can’t give you a ratio or a specific number to look for – your own ROI will depend on your company and your exact marketing budget. But will the tools we’ve given you here, you should be able to get a “big picture” reading on that ROI.