When we ask our clients how much return on their investment (ROI) they get from their marketing spend, many of them can’t answer straight away. In fact, some of them can’t answer at all.
That is because they don’t know how they get new leads and customers. They simply never ask their customers how they came to be buying their products and services. And if they do ask, they may not ask the right question… being told “Google search” doesn’t necessarily give you the meaningful information you need to make sure that you can replicate the success of that sale… what did they search for?
Some of our clients that do gather data about where their leads come from don’t often spend time analysing it. They don’t look to see if money is being well spent on expensive advertising campaigns or if all the effort they put into social media is paying off.
Recently, we went through an exercise with a client to analyse their return on marketing spend and found out some interesting facts – there appeared to be very few leads from the online trade membership website the business uses, and most leads came from referrals from an associated business.
Now, here is the critical bit.
Once you have your information, you must make decisions to get the most out of your marketing budget. This client decided to change the generic questions that were asked about “how you found us” to include asking about the phrase that was used in the search engine search, to ascertain if the membership to the trade website was actually generating leads.
They also decided to put more effort into their relationship with the associated business that did generate them new customers (and with similar businesses) to introduce themselves, their services and build a personal relationship that counts for so much. All of which didn’t cost them a penny – just time.
They found this exercise so useful, they have decided to review their Marketing return on investment every 6 months. After all, things change, and you need to keep track of any new marketing tactics that are introduced.
To summarise, to get the best out of your marketing budget you must:
- Make sure that you know where your leads come from. Ask “how did you hear about us?” followed up with a more probing question to get you real information. You need to know how many leads are generated and the value of these leads for each marketing tactic you undertake.
- Analyse your marketing spend. Use this formula to work out how much your ROI on each of your marketing tactic is:
Sales value generated by marketing tactic – Marketing tactic cost x 100
Marketing tactic cost
- Make decisions based on what you learn. Stop doing what doesn’t work and try to replicate what does work.
Is your marketing budget being well spent? Why not give the 3 steps above a try, and if you would like some support in developing your marketing strategy, please contact us at The Organised Business.