As a small business owner in the age of digital marketing, you might have heard about marketing ROI. While it’s a simple metric, measuring it has become an important task for business owners and digital marketers. However, with a variety of marketing channels available, it can be challenging to know when to use it.
In this post, we’ll explain what ROI stands for. We’ll also discuss why it is essential for your marketing activity. Then we’ll look at some common methods of tracking it.
Applying some basic measurement tips to your business can save you unnecessary costs and time. Read on to make the most out of your marketing strategy and budget.
What Is Marketing ROI?
Before we dive into some examples of tracking ROI, let’s take a look at the concept behind it.
Short for return on investment, ROI is a widely used marketing measurement. It shows you the performance of your marketing activities. Unlike gross profit, ROI is measured as a percentage by applying the following formula:
ROI = [ ( Revenue – Expense ) / Expense ] x 100%
Why Is Tracking Your Marketing ROI Important?
Learning and evolving is the key to success in digital marketing. To build a strong marketing strategy, you should constantly evaluate your marketing campaigns. Following your ROI is an easy and efficient way to do so.
By taking ROI into account, you can keep track of the effectiveness of your marketing efforts. This way, you can avoid spending unnecessary costs on poor-performing campaigns. And most importantly, you’ll be able to focus on the ones that increase your sales growth.
Ways to Track Your Marketing ROI
Now that you know the basics of marketing ROI, it’s time to see it in action. In this section, we’ll show you some useful methods to track your ROI.
Taking a Look at Analytics
Tracking the success of your content and email marketing may seem hard at first. However, if you have a website, you can benefit from various traffic-tracking tools.
These tools provide information about your visitors and your website's performance. This allows you to improve the weak points of your website to increase performance. It also highlights the best marketing activities by showing you where visitors come from.
A popular tool to help you with marketing analysis is Google Analytics. It’s a free solution dedicated to analyzing your customers’ online behavior.
Understanding the marketing data is essential when evaluating your social media strategy, too. On the most popular social media advertising platforms like Google Ads and Facebook Ads, it only takes a few clicks to view the ROI of each campaign.
Using Different Phone Numbers
If you use more than one marketing channel, then you might wonder which is the most effective. A great way of testing this is by placing a different business phone number on each one.
Let’s say you have two phone numbers: A and B. You put A on your website and B in your TV advertisement. If you get more calls to A, then customers are more likely to act after visiting your website. However, you should also consider the marketing cost of each channel.
Accompanying Your Advertisements With QR Codes
Many customers prefer to see a company’s online presence instead of speaking on the phone. Accompanying your print or digital advertisements with QR codes is a simple and transparent way to appeal to customers. Plus, they can help you track your ROI. Whether you appear on billboards, flyers, or a website, QR codes can easily measure customer reactions.
Depending on the QR generator software you use, you get access to information about your customer. Besides the campaign the QR code is associated with, you get to know your customer’s location and device.
Accompanying your ads with QR codes can help you track your marketing ROI
Direct Tracking Through Forms and Surveys
Perhaps the most direct way of tracking your performance is by asking the customer directly. Forms and surveys allow you to inquire about past experiences and brand awareness.
While these are excellent tools to track individual opinions, they might contain misleading information. Bias, false impressions, and improper questions all influence your customer.
To avoid getting false results, you should pay close attention to selecting the right respondent groups and questions. Allow your participants to express their views by providing a sufficient number of answer choices (or an open-ended response option). Plus, aim to keep your questions neutral — never indicate a preference that could sway respondents' opinions.
Collaborating With Influencers
As a modern approach, influencer marketing is a popular form of attracting new customers. It’s been around for some time, but we understand if you’re still skeptical about it. The good news is that it’s relatively easy to measure its results.
Providing a unique promotion code or link to each of your influencers is an excellent way to track conversions generated from their promotion efforts. This allows you to find and stay with the content creators that have the best audiences for your business.
If you aren't tracking your marketing then you are wasting your money. Gone are the days of just putting up a billboard or a tv ad and hoping people called you. With digital, everything should be trackable so you can know exactly where to put more of your money.
Tracking Your Marketing ROI With Scorpion
Tracking your marketing ROI is key to properly maintaining your marketing budget. Depending on your needs, you have a wide array of tracking options to choose from. However, finding and implementing the right one requires a broad knowledge of marketing trends.
If you need a professional team to carry you through the exhausting technical stuff, get in touch with us today. We’ve helped many small businesses just like yours with performance tracking.