Calculating Business Marketing ROI

Without a doubt, the current economic environment requires businesses to be more careful with and more demanding of their marketing budgets than ever before. If you want your company to survive and prosper, you must maximize your business marketing return-on-investment. So how do you calculate your business marketing ROI? What factors are the most important?

Most forms of advertising and lead generation are invested in terms of how many pieces or leads you receive for your money. For direct mail, it is how many pieces you send out; for pay-per-click, it is the number of prospects that click through to your site, and for Internet leads, it is how many actual leads you receive. When calculating expected business marketing ROI from an advertising campaign, it is important to recognize the difference between leads and revenues. It really does not matter how many leads or calls you get on your toll free numbers if none of them are converting into actual customers. In fact, too many contacts not following through will actually begin to cost you more money. While most lead generation companies will shy away from giving you any hard figures on what you can expect in actual closing ratios, the prospective close ratio is still the most important figure when calculating business marketing ROI. However, smart marketing companies and lead generators, who offer direct marketing like direct mail and use toll free numbers for tracking, should be able to show you real numbers from what similar campaigns have generated in actual prospects and incoming calls. These historic results help close the gap between your marketing pieces and actual business marketing ROI, but in the end, it still comes down to your staff to ensure conversion.

When calculating business marketing ROI, what you really need to look at is cost-per-action. In other words, what is it really costing for each new client and each dollar in revenues? Compare these numbers to your other advertising options; then strive to achieve the lowest cost-per-action possible and hone your campaigns to maximize business marketing ROI. This strategy includes doing a better job of targeting your ideal customers and improving the conversion capability of your phone staff or website.

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