No one wants to throw money at something without a tangible return, but sometimes that’s exactly what companies do. If you go into marketing blindly, it can be nearly impossible to tell if success or failure is somehow tied to that marketing or is merely happenstance.
Worse yet, you may have detailed reports on the correlations between your business and your investment in marketing but have difficulty interpreting and applying the data from those reports. This common dilemma is potentially more frustrating than having no data at all.
Thankfully, your return on investment from marketing doesn’t have to be an unsolvable riddle or a complete enigma. There are resources available that can help you translate and apply the information generated by your investments in a way that make sense to you and for your business!
Why is the ROI of Your Marketing Important to Understand?
Other than peace-of-mind, understanding the return-on-investment (ROI) of your marketing investments can help you determine where your successes and failures are. When you are able to quantify these details in a specific manner, you then have the opportunity to address and adapt.
For example, you may want to cut funding to a particular marketing outlet that is not contributing to your business in any substantial way and reallocate that capital. Efficiency is everything in business, and investing your money wisely can be the difference between striking gold and striking out.
You can also utilize this information to ensure you are keeping up with or exceeding the competition’s efforts. Each of these factors allows you to justify your spending, but more importantly, to more intelligently allocate the resources you have set aside for marketing.
How do you Measure MROI?
At its root, MROI utilizes the same basic formula as ROI: Return/Investment. Determining the actual return tied to marketing is no simple task, though. The reason MROI is trickier than ROI is because it’s often difficult to tell which clients were influenced by marketing and which were not.
In fact, the data that is relied on to determine MROI can come from many sources, all of which are fallible. From site traffic and SEO rank to customer feedback and new sales, there is no real way to say with absolute certainty exactly how much return is generated by marketing.
However, by examining each aspect of potential return—sales, brand awareness, time on page, and so on—a relatively accurate consensus can be reached. This estimate is then simply divided by the amount invested—a number that is much easier to come by.
How do I use this Information?
At this point, it may feel like you’re simply spinning your wheels. Maybe you already knew everything that’s been discussed or maybe its new information to you, but the question is likely the same: how do you use it to grow your business?
The answer is in simplification. It is absolutely vital that the mass of information available is sorted through and turned into a digestible report. The easiest and most time-efficient way to go about this? By putting it in the hands of an expert.
Digital marketing companies dedicate their business entirely to providing insight that is valuable and applicable to specific businesses and goals, thus allowing them to boil down masses of information into understandable and easy-to-use reports. It’s all they do! The information is already there, it just needs to be transformed into something useful.
The Internal vs. External Decision
Too often, companies looking to enhance their business’s engagement and lead generation through marketing take steps back in order to take a step forward. In other words, they’re not breaking even let alone achieving return on their investment. Honestly, as far as companies seeking traction through marketing internally, they’re either taking two steps backwards to achieve two steps forward, or are achieving something barely in the realm of any kind of return.
Last, assuming companies are achieving satisfactory results internally, very rarely are they doing so with the same flexibility, effectiveness, and efficiency as an external team. An outsourced marketing team that eats, sleeps, and breathes marketing will not only achieve better results that are measurable, but they’ll do it cheaper.
Assuming a company budgets $1,000 per month toward dedicated marketing, which is a fairly conservative budget, that would equate to $12,000 employee. Few, if any people, would work for for $12,000 for half of year let alone an entire year. Additionally, the cost of the marketing campaigns would only result in costs in addition to a salaried employee. Not only that, you’ll retain an external marketing team of several dedicated marketers instead of a single employee. For this reason, a dedicated marketing team focused entirely on your marketing every day is almost always the better choice.