objective of all marketing efforts, no matter what their form or extent, is to spread the word about your products and services to the buying public. Marketing efforts play a crucial role in the generation of leads, sales conversions, and brand awareness, as well as brand loyalty. Therefore, getting a good return on investment (ROI) is crucial when it comes to marketing efforts.
What is return on investment, exactly?
It’s one of the vital metrics that determine business performance, and takes some of the guesswork out of business decisions. When it comes to marketing efforts, it’s important to monitor return on investment and take steps to get a good marketing mix to ensure good return on investment.
So, when the question, “Are our marketing efforts working?” is asked, what really should be asked is, “Are our marketing efforts generating business in a profitable way?” It’s easy to generate business by spending vast amounts of money, but if there is no good return on investment, it’s pointless. Spending twenty rand to make ten just doesn’t make sense, as any business owner can tell you.
Return on investment drives company growth in the long and short term. A company that displays only poor return on investment will fold, and ideally ROI should increase as a company ages, so it’s a good gauge of how the business is doing overall. Because marketing also drives growth, ROI on marketing can be said to be especially important.
A candle to see the map by: ROI and marketing strategy
Returns on investment for marketing efforts guide marketing strategy, short and long term. Getting good returns can clearly indicate which of a company’s various marketing efforts ended up paying off – for example, which inbound marketing channels and campaigns worked best, and whether that one specific outbound marketing effort still has a place in the media mix.
ROI on marketing can be useful in tracking the relevance of a certain style of marketing – to use the same example, the ROI for inbound marketing efforts such as SEO optimisation and content marketing are often now higher than for outbound marketing such as newspaper or magazine advertisements. Young guns in the marketing field can now prove that new techniques such as SEO and social media marketing do work, and well work – and aren’t just a flash in the pan.
Getting money to spend money to make money: ROI on marketing and the marketing budget
Return on investment guides budgeting allocations in marketing as in every other facet of business. Obviously, finance departments are loathed to do anything perceived as excessively risky for the business. But when marketing departments are able to present cold, hard analytics to show what investment in marketing efforts brought, it’s just that much easier to lobby for an increased budget. Knowing which strategies work means that existing budget isn’t needlessly spent, and presenting data that shows a good return of investment is a sure-fire way of showing which strategies work.
For more information contact Chamberlink on 010-040 8328 or marketing@chamberlink.co.za.