Size Matters: Measuring Success with ROI for Marketing Campaigns
One of the most important metrics to any marketing strategy can be one of the trickiest to calculate: Return on Investment (ROI). Along with more tools to help you calculate it, digital marketing has seen ROI undergo some extreme changes. While the principle this metric has been around for a very long time, it’s only in the past decade or so that data became easier to collect and analyze. is easy to collect the data required for an accurate ROI.
Before we begin talking about specific types of marketing campaigns and where to find the information. Here’s a basic breakdown of how ROI works.
- Cost of Investment: The majority of these values will fall into one of two categories:
- Time + Resources: This one can be difficult to calculate because it varies significantly based on the type of campaign. For example, a direct mail campaign might include time to build a postcard, create text, and make edits. Compared to an email campaign (which includes a landing page and forms) is much more in depth to set up but less costly in the long run. It requires content, a landing page, a success page, and time to track it.
- Marketing Materials: Different than resources, marketing materials are things that can be monetized easily - like printing invoices and stamps/postage, branded promotional items, business cards, and more.
- Revenue Earned: When calculating this value, there is something you need to keep in mind. As a note, it’s always easier to measure ROI when you begin tracking products/services, opportunity, and lead source from the beginning. Setting up your campaign properly in the beginning will save you time in the long run.
Development + Execution: Cost of Investment is primarily going to be calculated during the development and execution phases. It’s where the bulk of your campaign budget will be spent.
- Development: Putting the pieces together.
- Content Creation: This value is calculated by the time it takes to research, write, review and revise content for the campaign.
- Design: Depending on the scope of the campaign, your email may be a simple and personal, like a message from the CEO, or coded and elaborate, like an eNewsletter. This might be time/resource intensive. It can be calculated by the cost of the time it takes to create and test both the email and the landing page(s).
- List Vetting/Preparation: Ideally, this is something that you’ll have been updating all along, but keeping marketing lists perfectly groomed can be grueling. Regardless, going over the list thoroughly will reduce the chance of emails bouncing or missed sales opportunities.
- Campaign Setup: Many MSPs use customer management software and applications to help them track sales, support requests, etc. The tasks might be a bit different based on whether or not you are using a PSA or CRM, but the basics of campaigns are pretty similar across the board.
- Create Marketing Campaign
- Attach Products/Services Offered
- Opportunities Generated
- Add QCL Tracking Codes (CW Marketing Manager Platform Only)
- Set Up Automation: Using automation rather than executing the emails manually? That time should be accounted for as part of the costs!
- Execution: It’s time for all your preparation to be put to the test! You’re ready to execute your campaign!
- Launching/Mailing: This step will probably just use a few moments of your resources time -as long as it takes to get to the post office or launch the email. However, if the campaign has multiple pieces, the few minutes might make a huge difference.
- Printing Costs/Postage: For direct mail, you’ll have to calculate the postage and printing costs as part of the materials.
- Marketing Collateral: In the event that a campaign requires you to send promotional items or marketing collateral, the total should include the cost of each piece of collateral sent, as well as shipping.
- Revenue Generated as a Result of Marketing Initiatives: Revenue generated is a total of income earned as a result of this given marketing campaign. This value will be very low with some types of campaigns and larger with others, depending on the initiative. For the most accurate ROI, here are two things to consider:
- Flat Rate vs. Recurring: Is this a one-time payment or sale of goods? Or will the customer continuously be generating revenue over a length of time? Often, only the first invoice of a monthly recurring revenue contract is included in the ROI. To determine the most accurate ROI, you’ll have to use the monthly recurring revenue multiplied by contract length.
- Portion of Revenue over Multiple Campaigns: In reality, most campaigns are a work in progress. For example, before converting a prospect into a client, your sales and marketing have been talking to them, working with them to make the next step. When there are 10 touches before signing a contract and one of which is the campaign you’re trying calculate an ROI for, then that revenue should be a part of that multiple campaigns ROI.
Even though it’s probably difficult for anyone in a service based, B2B industry to have a 100% accurate ROI all the time, a close estimation still can give you the idea of whether or not your campaign is successful. Do you have any questions about marketing and metrics? Sound off below with metrics that you find are important for your business!