Your Marketing ROI -- Are You Getting the Results You're Hoping For?
Are these summer days making you lazy? Are you craving some time away from the daily hustle? Then why not take an afternoon off and spend it in an enjoyable place (the beach, your favorite cafe, the park etc.) and review the results you've been getting from your marketing efforts so far this year.
Take a notepad and/or your laptop, and calculator along with a picnic basket if appropriate, and retreat to your favorite spot. Then take stock of the marketing you've been doing -- and how well it's been paying off (or not).
1) Begin with listing all your marketing activities:
Here are some typical examples:
- Networking (list all the different events you tend to go to and associations you belong to)
- Following up with contacts you've made while networking
- Other local lead generation activities
- Online social media (Twitter, LinkedIn, Ryze, Facebook, etc.)
- Article Marketing
- Email marketing
- Trade shows
- And so on.
2) How much time (and money) have you spent on each of them?
For each of the marketing activities, note how much time (and possibly money) you've spent on each of them.
For example, if you're going to a certain networking meeting once a month, figure out how many hours you spend there, including preparation and travel time. Also make a note of any charges you may have to pay to attend.
If you're writing articles, newsletters or blogs, take a note of how much time you spend writing each article, or how much money you pay someone to do it.
For social media add up how much time you spend each week on each one (Twitter, Facebook etc).
3) How many leads and customers have come to you from the various activities?
Count up how many leads you have generated with each marketing activity. It's best to keep them segregated - for example don't lump all your leads from different networking groups together. Keeping them separate will help you assess the effectiveness of each networking group.
As well, make a note of how many of the leads you received turned into customers.
4) Calculate the lifetime value of each customer
Let's say, for simplicity's sake, that each average customer spends about $1,000 with you over the course of a year, and stays with you for two years. That would be a $2,000 lifetime customer value.
Of course, it's just an average. You may make more or less per customer. Just ballpark it as closely as possible.
5) Now tally up your results
For each of your activities, divide the lifetime value of the customers they have generated by the hours you have spent.
For example, let's say you've received 3 new customers from 48 hours of networking (three hours per month for a monthly networking meeting), divide $6,000 (3 new clients times the average lifetime value of $2000) by 48 (number of hours). The result is that you've generated $125 of income per hour of networking activities.
However, since you probably paid $20 per networking meeting, and you went to 12 meetings and the association annual fees are $300, calculate your investment hard costs ($540) and deduct that from the $6,000. Then, divide the resulting $5,460 by 48. Your client acquisition costs or net earnings per hour for this networking group are $113.75.
Repeat the same exercise for each of your marketing activities.
Interesting, isn't it?
6) Take stock
Are you happy with those results? If not, you might want to rethink some of your activities and increase those that result in the best return for your investment of time and money. Are there some activities you want to drop, or increase? Perhaps some activities you need to focus more on or invest in more.
Just don't go overboard. There are intangible benefits in certain activities. You may have generated a lot of leads that may yet turn into customers, for example.
And there are certain marketing activities for which you may or may not have received an impressive ROI so far, but they do continue to build your visibility, and they can pay off for years to come.
Doing this mid-year marketing review will help you take steps to optimize your marketing efforts and create an increase in profitability.