Marketing is one of those significant business activities that generate huge revenues to organizations.
Most organizations conduct marketing campaigns to promote their products and services to the target customer segments. Marketing campaigns are conducted in different ways and the resultant output is usually considered as the return on investment.
Any effort is not complete if the outcome of the same is not measurable. Any effort that goes unmeasured cannot be considered as productive.
The role of marketing teams in organizations is directly related to the profit earning capabilities of the same. In typical business circles, output derived from investments made on marketing efforts is termed as Marketing ROI.
Tracking Marketing ROI is one of the crucial activities since it has a direct impact on the revenue and profitability of the organization.
Let us have a detailed look at Marketing ROI and 3 crucial ways to optimize on Marketing Campaigns in the following paragraphs.
What is ROI?
ROI is a business terminology that is usually calculated in terms of percentage.
ROI plays a crucial role in deciphering the profitability of business houses. ROI also paves way for calculating the profit earning capacity of investments made by organizations on different avenues.
Business organizations tend to know how to calculate ROI when their efforts are focussed on product and service promotion. Return on Investment is usually calculated taking the net profit into consideration after deducting the investment done on marketing activities.
The output of the above calculation is then multiplied by 100 to arrive at the exact percentage of Marketing ROI.
Marketing and ROI – The Two Important Sides Of The Coin
Marketing and ROI act as the two important sides of the coin called Business.
This is mainly due to the fact that each depends on one another to provide the best possible output to the organization. Marketing is an activity that seeks to promote the products and services of the organization in the best possible manner.
#Marketing is an investment, not a cost. If you’re not seeing a positive ROI on your efforts, you’re doing something wrong
— Adriana Layne (@AdrianaLayne220) August 15, 2017
The cost aspect involved in the same, however, acts as a controlling factor to decide on the mode of promotion. When both these combine together, calculating Marketing ROI happens to provide, crucial information about the breakthrough achieved in promotional activities.
Different marketing Campaigns work out well for varying types of products and services.
ROI calculation enables the organizations to understand the profitable marketing strategy adaptable at all any point of time. The activity called Marketing has reached new heights with E Commerce paving way for impactful Online Marketing Strategies.
Business units focus on the average Marketing ROI in order to retain their position and to rise up the ladder amidst the hectic competition.
ROI Calculator gets predominance owing to the crucial information it provides to organizations paving way for crucial decision making. Understanding the role of ROI in marketing will help organizations have the same on top of their priority list.
Role of ROI in Marketing
‘ROI in marketing’ is one of those terminologies that drive business organizations in a constant manner.
ROI clearly points out the efficiency of businesses in leveraging their resources to business advantage. Many Marketing ROI calculators are available today easing out the effort of assessing effective marketing campaigns to a great extent.
The precision with which such Marketing ROI calculators generate the final output helps organizations strategize their promotional efforts in a streamlined manner.
Let us have a look at the role played by Marketing ROI Calculators complementing the promotional efforts of organizations.
1) Gauging the investment in Marketing – Marketing ROI Calculator helps organizations understand their focus levels on marketing activities. Marketing ROI calculators help organizations understand the importance of investing in marketing campaigns when they under invest in the same.
In the same wavelength, Marketing ROI calculators clearly point out wasted investments in areas that have not yielded any favorable results. This is directly relevant to the growth of the organizations and their profitable sustenance in the business world.
2) Source of your customer – Marketing ROI calculators help in understanding the area of promotional activity that has been effective in lead generation.
A clear understanding of the source through which the customer is aware of your brand will help in the formulation of future marketing strategies.
Marketing ROI thus helps organizations to tap the right set of customers through the exact segment in a focused manner.
3) Directs the promotional efforts of Organizations – Marketing ROI calculator, by pinpointing the source of the customers, safeguard the efforts of organizations from the cost aspect also.
This enables organizations to pay focused attention to the areas that need the same and avoid wasting their energy on other unyielding areas
4) Generating new customer base – Marketing ROI calculators help in the identification of new customers. It enables a clear understanding of wastage of marketing efforts in wrong channels which fail to yield new customers.
It also identifies the most effective channel capable of creating new customers for the products and services.
Thus, roping in new customers becomes an easy task with perfect statistics about the same on hand.
Marketing ROI Analysis
Measuring Marketing ROI is a crucial activity that is to be carried out by every organization focussing heftily on marketing activities. Setting basic metrics for ROI is the first step towards earning profit against the competition.
Marketing campaign ROI has for long remained an assumption work rather than calculations that bring out the reality. The boom in the Internet industry provides wide exposure to Marketing ROI Calculator making it easy for marketers to understand the reality.
Calculating marketing ROI offers many benefits to businesses in a direct and indirect manner. Let us look at 3 ways to optimize marketing campaign ROI to carry out a profitable marketing ROI Analysis at all points of time.
3 Ways to Optimize Marketing Campaign ROI
Optimizing Marketing Campaign ROI means optimal utilization of all resources at the disposal of the organizations for gaining the market advantage. Many factors contribute towards this optimization.
The key ways to optimize Marketing campaign ROI are given below for clarity.
1) Visits To Your Webpage
The number of people visiting your website is generally termed as Traffic technically. Increased number of visitors to a webpage acts as pointers to its popularity. Knowing the source that drives the traffic to the webpage is the best way to assess the effectiveness of marketing campaign.
Applications like Hubspot and Google Analytics helps in measuring the effectiveness of Marketing ROI in a precise manner. Traffic to your web page generates business leads which can be followed up and converted to sales.
When the traffic that is generated fails to get converted into leads, it is a total wastage of marketing efforts. Tracking traffic to your webpage is a part of calculating the Marketing ROI.
2) Lead Generation Through Traffic to Webpage
Generating leads is one of the toughest activities of the Marketing Department. The realistic figures pertaining to Marketing ROI shows itself out through the leads generated by traffic to your webpage.
Leads act as pointers to returns pertaining to investments made on different aspects of your marketing campaign. Leads also take you to your customer directly helping you to ascertain more facts about your Marketing campaign ROI.
Such clarity of facts helps in making prudent decisions pertaining to Marketing ROI in the future campaigns. Generating leads is truly a huge effort.
Converting the valuable leads generated through marketing campaigns yields the real benefit only when the same is converted into sales.
3) Converting The Leads Into Sales
The ultimate goal of any Marketing campaign is to rope in more sales to the organization.
While generating Leads is one aspect, converting the same to sales gives it a meaning. All efforts put in by the Marketing campaigns are considered to be fruitful only when leads are converted into sales.
Tracking the percentage of leads converted into sales adds immense value to the efforts of the marketing campaign. Such tracking is essential to have clarity on the Marketing ROI. Particularly when it comes to Content Marketing, calculating the ROI is a mandatory activity to track the appeal of your content.
Content Marketing ROI helps in improving the quality of your web content to a great extent.
Some great tools available for measuring the ROI for content marketing are Twitter Analytics, Facebook Page Insights, YouTube Analytics, Hootsuite, Hubspot, Buzzsumo, Google Analytics, Hotjar, Kissmetrics, SEMRush, Spyfu and SEO Spyglass.
Choose any of these applications that suit your requirement the most and make good use of the same to assess your Content Marketing ROI.
Here’s A Wrap-Up
Measurement is the key to improvement. Calculate ROI on all your marketing campaigns.
Marketing ROI enables you to run your business on track with optimal levels of profitability. Marketing ROI enables you to take pertinent decisions pertaining to the approach towards your Marketing campaigns. Marketing campaigns can yield the expected results when they are based upon clearly set goals.
When goals pertaining to your promotional efforts are clearly set right at the beginning, tracking Marketing ROI is a cake walk.
Calculate your Marketing ROI and capture the complete market.