Struggling With Low Marketing ROI? Here are 3 Steps To Improve Your Ratio.
So, your business is finally up and running. You built your brand, launched your MPV, and summoned the best-in-class marketing experts to help you boost your sales. But somehow, you can’t shake off that feeling that your efforts aren’t converting as much as you want to. Your low marketing ROI makes you feel like your marketing efforts — and all the money you have invested into them are going down the drain.
We get it, but this equation can contact many business owners wondering if their marketing strategies are effective. And who;e low effectiveness can sometimes be the case, there are a few things you should get out of the way before jumping into this assumption. But first…….
What Is ROI In Marketing — And How Do You Calculate It?
ROI is the acronym for Return On Investment. In marketing, ROI is the impact that your strategies effectively bring to sales growth and revenue. ROI in marketing is calculated by the following formula:
(Attributable Sales Growth — Marketing Costs) / Marketing Costs = Marketing ROI
Always keep in mind that to calculate your marketing ROI, you should take into account the sales growth that is attributable to marketing efforts, and not total sales growth, to obtain a more accurate result. Be sure you are considering all marketing efforts in your marketing costs, including:
- Media and Ad spend;
- Content marketing costs;
- Human resources;
- Outsourced marketing costs;
What Is A Good ROI In Marketing?
Typically, a good marketing ROI is 5:1. That is, five dollars earned for every dollar spent. A 10:1 ratio can be considered exceptional.
What To Do If You Are Struggling With Low ROI In Marketing?
Now that we have got all the mathematics out of the way, let’s deep-dive into purposeful solutions:
1. Revisit Your Marketing Strategies
Sounds quite apparent, doesn’t it?
However, many businesses and marketing teams often make ground to achieve their results but overlook basic strategies. Before revisiting the more analytical aspects of your marketing strategies — such as your ad performance, organic traffic to your website, conversion rates, and more, try taking a step back and analyze other aspects, like:
- Is Your Buyer Persona Well-Established? Oftentimes businesses spend a lot of effort and money into a well-wrapped and sophisticated marketing campaign but are hitting the wrong target. A good way to understand if you’ve mapped out the right buyer persona is by listening to your customers and finding out how and why they’ve picked your company to do any type of business. Try interviewing your loyal customers and identifying what they have in common among them; this can be an effective way to establish the right buyer persona for your business.
- Is Your Copy Well Fit For Your Buyer Persona? You can have an amazing copy on your website, landing pages, and social media accounts…. and, still, it won’t resonate with your buyer persona. Revisiting your content with a different look can boost your conversation rates and sales.
- Are You Tackling The right Channels? You might be putting too much effort into a channel that doesn’t fit your buyer persona — and this goes for both digital and offline channels.
- Are You Tracking The Right Marketing KPIs? You might be looking at the wrong metrics and getting faulty insight into your marketing strategy. Try gathering your marketing, sales, and business intelligence team to revisit your metrics and possibly establish new ones.
Not only will this process help your business with marketing strategies in the long run, but it will also help you identify if there is any space for optimizing your budget. You might identify certain campaigns that aren’t performing as well as expected and relocate your budget into strategies that have a more effective background within your company.
2. Trail Your Customer’s Journey To Spot Possible Friction.
If you think about it, marketing is just one step to a long customer journey. You might have outstanding marketing campaigns and tons of qualified leads popping into your CRM, but what about the rest of the journey?
- Is your sales team working on the right tactics to convert your leads?
- Is it easy for potential and existing customers to reach out to your team and be provided with high-quality support?
- Does your company provide any free trial so your customers can experience your product before committing?
- Is your customer success team engaged in collecting feedback so you can enhance your product or service?
These actions have a direct impact on converting leads that were brought by marketing strategies. If you are facing low marketing ROI, eliminating friction and providing a seamless experience from end-to-end can help you improve your marketing ROI ratio.
3. Examine Your Product As If It Weren’t Your Own
Or have a consultant do that for you. The fact is, business owners often overlook the issues with their products. You might have an excellent product, but it is not competitive in the industry, or you might have great marketing, but your product still needs some fixes. Or sometimes, you might have an excellent product, but it is not competitive in the industry; or, you might have great marketing, but your product still needs some fixes. Or, sometimes, you might want to consider even launching a new product to keep your brand fresh in the market.
Conclusion:
However, it can be challenging to look into these types of problems — which is why a consultant with a fresh pair of eyes can be very helpful in identifying these issues. Following these steps can provide you with great insight into your marketing and business strategies. Keep an open mind and your marketing ROI will be set to skyrocket!
