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A must-have guide to marketing roi

Formula & Examples:

Okay, you’ve heard about inbound marketing and you’re convinced that you would benefit from this marketing roi methodology in your business. But… will it be profitable? How much will you have to invest to get good results? To ensure the positive ROI of your inbound strategies, you must clear up some questions.

1. Define your objectives

Inbound marketing sets in motion friendly actions to attract the user to your company -your company’s web site- in a natural way. These non-intrusive attraction techniques have 3 objectives. In reality it is the same and unique: SELL. They are techniques that help you to achieve:

Increase the number of visitors to your website. It is important that users come to your website so that they find the information they are looking for. Some ways to get them to come to your website are blogging -make content on the blog-, optimize the website and make content on social networks.

Get these visits become leads, ie contacts with which to have a long-term relationship. Collecting at least the contact information, the email. The user arrives at your website as an anonymous visitor and you offer him content that interests him. And in return what do you ask? Most of these contents are free. What you ask them for is information, their email.

Now you can put them “face and eyes”, you can send them communications, giving them more and more interesting content and end up seducing them 😉
Get customers. Now that you’ve attracted the right visitors and converted the right leads, it’s time to turn those sales opportunities into customers. This is where marketing automation comes in.

2. Establish a number of sales and conversion rates

You know that you need to attract visitors (the right ones, not the others) to your website and work to turn them into leads and, thirdly, into customers. But… do you know how many customers you want to reach? It is important that you define quantitatively the number of sales you want to achieve.

While having ambitious goals is beneficial, it is still important to keep these goals realistic. If your company’s history has generated an average of 10 leads per month, jumping to 2,000 leads per month would be a dramatic change. Not to call it collective employee suicide.

Having defined the realistic number of sales, you have to calculate the conversion rate from visit to lead and from lead to customer. The conversion rate is calculated by dividing: number of total conversions/number of total visits.

And since a picture (or in its absence an Excel) is worth a thousand words, here is an example:

 Scenario 1 Scenario 2 Scenario 3
 Target (customers per month) 10 20 20
 Traffic (visits per month) 1,000 2,000 1,000
 Conversion rate 1% 1% 2%
 Customers 10 20 20

*There are two options to achieve 20 customers: double the traffic or improve the conversion rate. Which of the two actions is simpler? Which is more effective?

3. Decide how much you are willing to invest to calculate the ROI

This is where we take the wallet out of our pocket. We are talking about investment, so you will need to know how much money you are willing to spend on your inbound marketing strategy to see if your efforts will have the results you expect.

You should be prepared to answer questions like:

How much do you invest per month in marketing to achieve your sales?
When a customer buys from you, how much do you spend on average per month?
On average, how many times or how many months does a customer buy a year?

With the answers you will be able to clarify marketing concepts such as

Customer lifetime value. This is a value that, based on a long-term marketing concept, calculates as a number X the relationship that a customer has with your company, that is, how much a customer spends in your company in a given period.

ROI: Return of Investment. This is the difference between the value of all your customers and the money you have invested in inbound marketing to get them. And multiplied by 100 to obtain the percentage figure, if it is greater than 100, it is positive ROI; if it is less than 100, it is negative ROI.
ROI = (profit obtained – investment) / investment x 100

Process-is-equalt-to-marketing/

Jose Limardo

Jose Limardo

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