What’s Return On Investment (ROI)? Businesses talking about ROI refers to how much profit the company generates from a given marketing campaign. Regarding marketing campaigns, return on investment is evaluated by looking at three statistics: the advertising cost, the sales rate of a product or service, and the profit generated. Business owners hope that their campaigns will yield enough profit to offset advertising costs and other related expenses reasonably. In this article, we’ll look at five ways to measure the ROI of your managed service provider’s MSP marketing efforts.
Table of Contents
1. Define Your Goals
Before you can measure the profitability of your MSP marketing campaign, you need to determine what it is that you are trying to accomplish with those campaigns. What is your final objective? Is it to acquire new customers? Is it to get more phone calls from current customers? Or, perhaps, you want more leads that would then be converted into new customers or phone calls from existing clients
2. Track Marketing Metrics
Before you can analyze your campaign’s results, you need to track some marketing or business metrics to measure the campaign’s impact. Here are just a few:
-Measures for how many leads were generated
-How quickly did those leads convert into new customers?
-Do those customers generate more revenue per month than they cost your company to service?
-What percentage of the new customers cost more than they generated in sales?
3. Calculate ROI
If you have tracked your marketing metrics and measures, it’s time to take the last step. You have performed enough analysis to determine if there is a business case for continuing with your campaign. The next step is to calculate profit from cost.
-Calculate the total marketing campaign cost
-Calculate total sales generated
-Divide by Cost to calculate ROI
4. Stop and evaluate marketing campaigns
As you are analyzing your past campaigns, it’s time to stop evaluating those campaigns based on the ROI alone and assess them based on actual results vs expected results. Once you have “lasted more than a season” in any given customer acquisition campaign, for instance, thoughtfully consider whether that customer was a good investment.
5. Analyze the Results
After you have analyzed the results of your campaigns, it’s time to consider why the marketing campaign didn’t yield the results you thought it would. Successful marketing campaigns are a blend of math, science, psychology, and art. A lot of things can go wrong. But if you have carefully collected the proper data through the proper analysis methods, you should have an idea as to what didn’t work as planned.
Business owners can’t spend money on marketing campaigns and then hope that sales will magically appear. All too often, marketing dollars are spent with little thought as to what they’re supposed to accomplish. This is a recipe for disaster. Even if your managed service provider marketing campaign doesn’t work at first, it’s not the end of the world. It’s important to evaluate your programs regularly in order to make improvements and course corrections when needed.
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