How to Measure Marketing ROI

October 6, 2017



There are a number of ways to measure your marketing ROI (return on investment) in relation to your content such as your articles, videos, social media posts, email marketing and so forth. The way you will measure will depend on the goals you set and the platforms you use.




In most cases, you will have one of three goals:


* Get more leads
* Make more sales
* Increase brand awareness


Depending on the goal, you will then choose one or more marketing platforms and look at the metrics for each. Here are some of the most important marketing methods to help you achieve your goals, and what to look for in terms of ROI.


Search Engine Optimization (SEO)


With SEO, you are going to look at the amount of traffic you’re generating from your content by checking your traffic logs. The best program to use is Google Analytics. It is a very robust program with extremely detailed information. 


If you don't already have an account, the first step is to sign up for a free one. Get a free Gmail account, and it will give you access to all of Google’s free marketing tools via only one password. Copy and paste the special analytics code you will be given in the interface, and then start tracking each piece of content and each marketing campaign you create to drive traffic to certain pages.


Pay Per Click (PPC)



If you have a budget, drive traffic through PPC and calculate your ROI in terms of how many completed actions are taken. This could be subscribers for your email marketing list, or sales. In terms of subscribers, you should have a rough idea of the dollar value of each person on your list, for example $1. As long as you spend less than $1 getting the lead, you are getting decent ROI. In terms of sales, deduct ad costs from your profits. Google AdWords, Bing, Facebook and Twitter all have good advertising programs.


Social Media Marketing


This can be free, or paid. In terms of free, track your results through the analytics for each site. For example, at Facebook, use the Insights tab. Also pay attention to the messages about sponsoring your best posts - that is, turning them into ads. Facebook and Twitter ads are more targeted than Google’s and cheaper too. 


In addition to sponsored posts, you can promote your account, and you can also create ads from scratch. Use all three methods and track your results in terms of clicks, costs and completed actions. 


When setting up any social media campaign, create a special URL to help you track your results more easily. Post videos on YouTube and check your logs regularly in terms of views, likes and subscribers.



Email Marketing


Social media marketing is extremely popular, but if you want to build relationships with your target audience over a period of time to engender trust and loyalty, email marketing is best the way to go. 


In determining ROI, you'll have a number of metrics to look at. The first will be the number of subscribers you get for each campaign. For example, offer a free ebook or ecourse about a particular topic of interest to the people in your niche and check traffic versus sign-ups. 


When you start emailing out information to them, your next metrics are going to be your open rate, click-through rate and your conversion or transaction completion rate. If you are trying to sell a product, you can track the number of clicks and the number of sales.



All of this is great and all, but there are some other numbers you will need to crunch in order for these metrics to matter. These numbers are what we call Cost Per Acquisition (CPA), Customer Retention Rate (CRR), and Customer Lifetime Value (CLV). If you don't know how to calculate these already, I have provided the formulas below:



CPA (Cost Per Acquisition)


CPA = (Cost/ Conversions)



CRR (Customer Retention Rate)


CRR = (CE Customer’s End Period – CN New Customers for this Period) / CS Customers at Start of the Period * 100



CLV (Customer Lifetime Value)


AOV = (Number of Orders / Revenue)
PF = (Average Order Value / Number of Unique Customers)
CV = (Average Order Value * PF)
CLV = Customer Value * Customer’s Duration with the Company


ROI (Return on Investment)


ROI = (Net Profit / Cost of Investment) * 100


Once you figure these numbers out, the above metrics will make alot more sense. Managing your time as well as your money well, and tracking all of your results, will ensure that you get the most return on your investment of effort and cash when it comes to marketing your own business successfully.


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