In such a competitive world, you need to measure which strategies work especially in digital marketing. To measure the performance of your actions, measure your marketing ROI. This article will explain the ROI, its importance, its calculation methods and how to improve it.
What exactly is ROI in marketing?
ROI (Return On Investment) in digital marketing is defined as an indicator that shows whether the investments of your marketing actions are obtaining positive results in relation to the resources invested.
If this indicator shows a negative value, it means that the expenses are greater than the returns generated by a specific strategy and the company suffers a loss with this action.
When the opposite occurs, it shows that the action has allowed the company to make a profit.
With these numbers in hand, you can determine whether or not your company’s marketing strategy is working. This allows you to base all decisions made on numbers and statistics, not unreferenced predictions. Marketing ROI is thus an essential indicator for the success of any business. Eskimoz Studio tells you how to create content with a good ROI.
How important is ROI?
The ROI allows you to evaluate your various marketing actions in order to improve them. It offers the possibility to the company to evaluate the impact of its marketing strategy on the target audience.
Thanks to indicators such as ROI, you can adapt your strategy according to your results. One of the main advantages of digital marketing is the possibility of investing on several fronts through different channels and messages.
Within your set of marketing actions, for example, one of them may be effective, while another may not be as effective, undermining the whole strategy. By calculating the ROI, you can effectively use your company’s resources based on real and practical facts of your communication campaigns.
How to calculate the ROI?
To measure ROI, you need to consider the different objectives of your business for each action. Depending on this, you must follow the performance indicators corresponding to your different objectives.
Find out your conversion rate
If the goal of your marketing strategy is to increase conversions, you need to measure the conversion rate. In addition to visits, your blog must generate a business opportunity through conversions. If the conversion rate is low, it means your landing pages need to be optimized.
Find out your cost per lead (CPL)
For those looking to increase the number of leads generated, cost per lead stands as the metric to watch closely. From this figure, you can know the money invested to acquire a lead.
Calculate your cost per acquisition (CPA)
If the goal of your marketing action is to acquire customers and not leads, the cost per acquisition will help you understand your ROI. This is the amount invested to acquire a new customer.
In fact, there are an infinite number of indicators to follow depending on your marketing objectives and the leverage used. The key is to carefully evaluate each action in order to optimize your marketing strategy.
How to improve the ROI?
After calculating your ROI, you then need to know how to improve it. Your ability to adjust the different marketing actions guarantees the success of your business.
Define your goals
As with any marketing or sales strategy, the first step before putting a plan into action is to set a goal. Does your business need to boost brand awareness? Where should it generate more qualified leads?
Whatever your goals, it would be helpful if you defined exactly what you are looking for with your actions so you know what to evaluate.
Use the most appropriate indicators
After all, what’s the point of calculating your cost per lead if, in fact, your main business goal is to increase the number of customers?
You must therefore choose metrics that are consistent with the objectives of your digital marketing campaigns.
Do not act on a single marketing lever
Unlike traditional marketing, the main advantage of digital marketing lies in the plurality of options and possibilities of impact on the public. Therefore, not directing all your attention and resources to one or two actions.
Experiment, use different communication channels, change the tone of voice of your efforts, and finally, don’t limit your strategies.
Identify opportunities for improvement
It is not enough to identify a bad result. You have to turn it into an opportunity. Always look for ways to improve the offer provided to the consumer. Even when the results remain positive, your goal should always be to improve what you offer.
As you can see, ROI in marketing shows a business whether a strategy is working or not. Before planning your next actions, take the time to measure and improve your company’s ROI.