Calculating your Return on Investment (ROI) and measuring it against a new campaign is easier if you follow 3 key steps.
Simply measuring all three factors will give you detailed insights into your ROI. For example, you could learn that while Google Adwords is performing the best for your CPL, but a significant volume actually do not, or very rarely convert. Likewise, you may discover that while trade ads cost the most, their conversion rates rank highest.
By combining regular reviews of your marketing strategies and having an open, honest culture of discovering and sharing openly within your organisation on ways to improve can effectively maximise your ROI.
Here are 3 simple steps:
Step 1: Identify What Your Customers Want
It is impossible to increase ROI while trying to sell your customers something they don’t want. The key is identifying at the beginning the needs, wants and expectations of your target demographic.
Firstly, identify your target audience.
- How old are they?
- What is their marital status?
- Do they have children?
- What is their income bracket?
- What is their socio-economic background?
All of these questions help you to define your target audience, which in turn helps you to develop buyer personas.
Buyer or audience personas are a partially fictional representation of your target audience based on a combination of real facts about existing clients (i.e. historical data), and market research. You can learn and understand t your customers better by utilising predictive analytics, surveys, journey maps and adaptive conjoint analysis – or resort to basic fundamentals, in essence basic common sense. By learning about your customers through a multifaceted approach, you can get a holistic, unbiased and honest picture of who they are and what they want. Then, you can mould your services and products to fit your customers, instead of the other way around.
More sales increases ROI!
Step 2: Analysing Your Marketing Performance
A good marketer will tell you what the best channels are for each marketing campaign. For example, direct mail, while generally more expensive than email marketing, can be more effective. Email marketing has become less effective due to the deluge of promotional emails received by consumers daily. The challenge then becomes, how would your email campaign stand out in an inbox full of hundreds of promotional emails?
Optimising your marketing strategy by allocating budgets to channels that perform the best according to your own internal KPIs, will evidently maximise ROI.
Step 3: Pay Per Customer Acquisition
In an ideal world, you would be able to readily demonstrate and prove to your board how every marketing budget cent helps directly acquire a customer. Sadly, we don’t live in this perfect world. However, there is no better way to improve marketing ROI than by paying – and only paying – per customer acquisition.
It’s even better if you can show, for example, that this year’s $1 million budget acquired 1,000 high value customers with a net spend of $10 million, rather than last year’s $1 million budget which delivered thousands of clicks, Facebook followers and millions of page hits.
The main hook for decision makers is essentially whether or not your marketing campaign translates to delivering customers. Aligning your activities to this objective will reduce any marketing wastage and simultaneously maximise your ROI.
Want to find out more about pay per customer acquisition? Let us know your requirements and we’ll be in touch to discuss how you can get the right customers and only pay for results.