What You Don’t Know About Your ROI is Hurting You!

If I asked you to give me a snapshot of your return on investment in marketing, could you do it? If your answer is “No!” you’d have a lot of company among business owners. The focus in marketing is usually on getting the next campaign ready, finding new channels and figuring out how to pay for it all. But what you don’t know about your actual return on your marketing investment IS hurting you. Let’s talk about how to get started.

What’s Your System?
Here’s the most important question: Are you tracking marketing results at all? If you don’t have a formal system for doing so, start today. Even if it’s only a spreadsheet, you must have a method of recording the sales, leads and traffic that result from your marketing channels, if you ever hope to become really good at marketing.

Here’s a good way to get started: Make a list of the marketing channels you’re currently using—blogs, social media sites, emails to your list, web content, Google AdWords, etc. Under those headings, create a new listing for each campaign you’ve run for the past six months.

Now, record as much information as possible about new leads, web traffic or sales gained as a direct result of each campaign. You may not be able to record much this time around, but it’s good to go through this exercise to get in the habit of tracking ROI.

Which Worked Best?
The next question is: Which worked best? Did you see a big burst of traffic when you started pinging blog posts on Technorati? Did your latest email marketing campaign yield lots of new leads?

Which AdWords brought the most click-throughs? Can you see a marked difference in website traffic each time you update your Facebook page or get serious about tweeting on Twitter?

This is the time to compare each marketing channel in terms of traffic and leads. Not only will it give you a sense that your marketing is actually working, it will also tell you what’s worth spending time, money and effort on.

Once you know which channels attract the most interest, it’s time to look at sales conversions. Record how many sales resulted from the traffic each marketing channel generated. This conversion rate is the holy grail for marketing, the reason for all that tweeting, updating and keyword agonizing. Once you know which methods of marketing online result in the highest conversion rate, you can focus your efforts effectively.

Tracking your marketing ROI isn’t just about how much money you’ve spent. It’s also about knowing how much time to spend on marketing channels, and when to cut them loose. What you don’t know about your ROI may be hurting you now, but with a little focused effort, it can make all the difference in your future success.

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