Why it’s important to measure your online marketing ROI
(Return On Investment)
Consider this question: would you purchase a lottery ticket, and never check to see if you had the winning numbers? Furthermore, would you keep buying more tickets, week after week, and still never check your results?
The same principle applies to your business & your marketing ROI -- if you’re not measuring your online marketing ROI (return on investment), you’ll never know if your business & marketing strategies are winning... or more importantly, losing.
By now you already know that to compete in today’s business climate, you must have an inbound marketing plan & market your business online. You may have even learned about the many inbound marketing components, (web site, social networking, blogging, etc), available to drive your overall inbound marketing strategy. But without measuring your inbound marketing ROI, how will you know which of these avenues (sources) are providing the results you need in order to reach your business revenue & marketing ROI goals?
Perhaps an even better question would be, have you set your revenue & marketing ROI goals yet?
Obviously you can’t reach your online marketing revenue goals until you have determined what those goals are. You must first calculate what your business needs to earn in order to reach your desired level of profitability & marketing ROI. So start with a number – this could be $500 per month or $500,000 per month; whatever number represents a sufficiently profitable ROI to meet your company’s objectives and requirements.
Now that you have a figure in mind – the next step is attaining it. There are many steps to accomplishing this goal, but the overall online marketing strategy can be broken down into two major segments: Calculating, and Measuring.
To break this down further:
- You must first calculate how many online visitors (traffic), leads and sales conversions you will need each month in order to achieve sufficient marketing ROI to meet your online marketing revenue goals. These numbers can be established using a creative mathematical process, and basing potential results on current, realistic industry standards. You don’t have to do the math in your head; here’s where you can download a convenient (and free) tool that calculates your marketing ROI objectives with just a few clicks of a mouse. Let’s have a closer look at what items need to be calculated in order to determine what you’ll need to reach your revenue goal number:
- You’ve already got your monthly revenue goal in mind -- so how many sales per month will you need in order to reach that number? To answer this question, and using the Inbound Marketing revenue calculator referenced above, simply enter the average sale amount you are paid per customer. The calculator will then tell you how many new customers you need each month to meet your overall marketing ROI & revenue goals.
- Now that you know how many new customers you need for sufficient marketing ROI to meet your financial objectives, you must determine how many of your inbound marketing leads will need to convert to customers in order to reach your necessary level of sales. Keeping in mind that not every lead will convert to a sale, the resulting number should be based on standard industry percentages, (for ex: 2% lead-to-sale conversion rate).
- Finally, you must calculate how many visitors will need to find you online in order to convert to the number of leads you need from the previous step. Once again, considering that not all visitors will convert to leads, you must base your calculations on standard industry conversion percentages.
Armed with the information extracted from your marketing revenue calculations, you now know how many visitors, leads and sales are needed to attain the marketing ROI you require to meet your inbound marketing revenue goals. This is critical information to have on-hand, as these are the essential stepping stones toward meeting your pre-determined business objectives.
The second crucial segment to a successful inbound marketing strategy is measuring the marketing ROI from each of your individual online marketing components. This information will tell you:
- Which of your online strategies are netting the greatest marketing ROI
- Which of your marketing components are draining your investment dollars
- Most importantly - where you should be focusing your efforts and valuable resources
Without this critical data, you’re basically navigating in the dark, which will make it far more difficult – if not impossible – to find your way to maximum marketing ROI and the necessary revenue goals you need for a successful (and profitable) online business.
To get started, download this free Inbound Marketing revenue calculator guide to get a better understanding of the process of establishing your revenue, traffic & lead objectives and how to best evaluate your progress.
Two Very Helpful Free Downloads That Will Help You Understand: