Calculate Your Success - Marketing ROI Made Easier

In simple terms, measuring a return on your marketing investment starts with this assumption: The profit you realize from the sale of your goods and services cannot be less than the cost of the marketing you do to reach, engage and convince these consumers to buy.

The actual calculation of Marketing ROI is a percentage using this formula:

      (Profit from all sales – Cost of marketing)/Cost of Marketing

A marketing ROI calculation can be used to

  • show how effective your investment in your marketing programs has been (looking backwards)
  • decide which marketing programs are the most successful (deciding what to keep and what to cut)
  • justify an expenditure on a new marketing program (deciding what to switch to or start)

 

It sounds so simple but ROI calculations get really complicated when you have to factor in things like:

  • Lifetime value of a customer: Marketing is about making friends for life, customers who keep buying over and over again. Any calculation of ROI should take into account profits on all sales to all customers.
  • Customer Acquisition Rates: Predicting how many customers you’ll have next year and the year after as a result of your on-line marketing outreach efforts is also tricky. You need to step back to think about how many consumers you’ll get permission from so you can grow your relationship with them. You’ll then need to determine what percentage of them will become customers.
  • Cost of Marketing: You’ll need to add up all the associated marketing costs from all the programs you run including software products and people services. Not always a simple task.

 

Very soon on the 80/20 website we will have a handy little online calculator to do all the math for you. In the meanwhile we’d like to leave you with one thought....

If you aren’t reaching and connecting with consumers, you won’t have any customers. Without customers, and lots of them, all the math in the world won’t make your CEO happy. So start now, by exploring how 80/20 Solutions can help you do two things:

  1. Reach and relate to many more consumers than ever before
  2. Consolidate many marketing programs into one system

 

By reaching and relating to more consumers, you’ll be increasing your rate of customer acquisition and the lifetime value of every customer. These are both critical.

By consolidating many marketing programs into one system, you’ll be able to do more without increasing your costs, and you might even be able to lower your costs.

Call or email us and we’ll share some real-world success stories from companies just like you. We’ll show you how easy it is to show a positive return on your 80/20 marketing investment.