5 Steps to Measure Your Marketing ROI

Every dollar you spend marketing your business is a dollar you’re not taking home. It is also a dollar you are investing in hopes of making even more money on the investment down the road. But how do you know if you’re just aimlessly throwing money away each month or if your marketing efforts are truly bringing clients in the door?

There are several things you can implement to measure your return on investment, commonly called ROI.

ROI = (Net Revenue – Marketing Expenses / Marketing Expenses ) *100

In the marketing ROI formula above, net revenue equals your total revenue minus the cost of services (i.e. salaries, cost of goods, etc…).

Before you begin implementing this formula, you need to follow five steps.

Step 1: Define what you’re marketing
In order to know if you’re successful in your campaign, you need to clearly define what you’re marketing. Are you marketing one of your services, a certain set of hours, a new feature, or a new medical provider? By defining what you’re marketing, you can setup ways to track how your marketing plan achieves your goals.

Step 2: Define what will count as “return”
Some marketers only count return as customers in the door. Others count return as the number of visits to a website or the number of phone calls received. Perhaps at an event, “return” is the number of contacts you get to add to your email database. Defining what counts as “return” before you start a campaign prevents you from convincing yourself a campaign was successful down the road based on factors that you didn’t really equate to success.

Step 3: Measure total cost of marketing
The next thing you need to calculate is how much does the marketing cost you. This may include the salary you spend paying someone to do the marketing for you, or you may only focus it on the actual cost of running the campaign (i.e. ads purchased, cost of promo items). Most people do not calculate in the salaries associated with a campaign.

Step 4: Set-up measurable calls to action
This is the most skipped step in marketing. Most ads fail to ask people to do something that will allow you to track the campaign’s success. Look at your advertisements and community involvement marketing materials. Do you have unique phone numbers or website landing pages that let you know how many people contacted you because of them? Do you hand out unique gift cards or coupons for certain things at community events, so you can track people coming in from those events?

Step 5: Determine length of your marketing campaign
Finally, you have to set a length for how long you’re going to measure your campaign.

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