How to Increase Marketing ROI in 7 Steps

Marketing return on investment (ROI) is a metric used to assess the success and profitability of marketing initiatives. It enables companies to evaluate the financial results of their marketing campaigns and decide if the funds invested in marketing yield a profit.

So it’s like putting a magnifying glass on your marketing activities and asking, “Hey, are you pulling your weight around here, or should I be sending you off to the marketing retirement home?” By evaluating the ROI, you can determine which marketing tactics generate the most significant returns and decide where to devote resources.

But what happens if specific marketing strategies are not generating a positive return? Here’s how to increase marketing ROI in seven simple steps:

1. Set ROI goals
2. Make an ROI tracking plan
3. Focus on high-performing channels
4. Analyze and optimize
5. Focus on metrics that matter
6. Use marketing automation technology
7. Run experiments frequently

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$10 billion

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1. Set ROI goals

When you want to increase marketing ROI, it’s helpful to set an ROI goal. Having a well-defined goal can help you develop a plan for accomplishing and tracking your progress. When you set your ROI goal, make it a SMART goal — one that is specific, measurable, achievable, relevant, and time-bound.

• Specific: Instead of something vague like ‘increase ROI,’ your goal should be something specific like ‘increase ROI by 25%.’
• Measurable: Make sure you can measure your progress toward your goal. Have the right data collection and reporting methods in place.
• Achievable: If your goals aren’t realistic, they won’t do you much good. Your goals can be ambitious, but make sure you can realistically achieve them.
• Relevant: Your ROI goals should be relevant to your overall business goals. For example, if your main objective is to increase sales, getting more Instagram likes isn’t a relevant goal unless it contributes to sales.
• Time-bound: Establish a timeframe within which you’ll aim to reach your goal. Making your goals time-bound provides motivation for completing them in a timely manner.

2. Make an ROI tracking plan

If you’re not tracking your marketing ROI, you won’t know if you’ve successfully increased it. Creating a plan for tracking your ROI is crucial to improving it. Determine which digital marketing ROI metrics you need to track.

Some common metrics include sales, website traffic, and leads, but the right ones depend on your goals and the type of campaign you’re running. You also need to make sure you have the right tools for tracking ROI.

One of the best available tools for ROI tracking is Google Analytics.

To track ROI using Google Analytics, you’ll need to set up tracking for the conversions you want to measure, whether that’s sales, leads, or another conversion type. You can track ecommerce sales with the Ecommerce report. For other types of conversions, you’ll need to set up Goals.

3. Focus on high-performing channels

After you’ve collected some conversion data, you can look at your data to see how much various channels and campaigns contributed to your conversions.

Go to the report under Conversions > Multi-Channel Funnels > Assisted Conversions and then select Conversions at the top of the report. This will show you conversion data for each channel.

You can also look at the Top Conversion Paths report to see the steps that led to conversions.

Furthermore, you can use attribution modeling to assess how each channel affects conversions. This will assist you in locating the channels that are producing the most significant conversions for your company. By concentrating on these channels, you can manage your resources and streamline your marketing efforts to increase your conversion rates.

4. Analyze and optimize

Once you have identified the high-performing channels and the specific steps leading to conversions, analyze and optimize your marketing efforts. This step entails delving deeper into the data to determine the variables affecting conversion rates and making the required corrections to optimize outcomes.

Suppose your business uses several social media sites to promote its website. Data analysis reveals that Instagram works the best, and one particular touchpoint is a promotional post with a direct link to the brand’s product page. Your team can tweak their marketing tactics to devote more time and money to Instagram and produce exciting content that suits the tastes of their target demographic.

As a result, they might see an increase in conversion rates and overall sales. You can also identify any bottlenecks or problems preventing the conversion process and devise solutions by studying the conversion data.

5. Focus on metrics that matter

If you want to increase your marketing ROI, be careful when choosing what metrics to track. Ensure these metrics truly reflect progress toward your most important goals and are not just vanity metrics that look good but provide little value. The right metrics to track depend on the goals of your campaign.

If your goal is to increase revenue or sales, you may want to track metrics such as:

• Conversion rate: The percentage of leads or site visitors that convert
• Cost per acquisition: How much it costs you to acquire a new customer
• Customer lifetime value: How much a customer is worth to your business over the entire length of time they’re a customer

If your goal is to increase brand awareness, you may want to track metrics like:

• Direct traffic: The number of users who come to your website directly, such as by typing your website’s URL into their address bar
• Referral traffic: The number of users who come to your site via links on other sites
• Social media mentions: The number of times users mention your brand, product, or service on social media

The digital marketing ROI metrics you track influence how you work toward your goals. So, measuring the right metrics ensures you know how to improve ROI in digital marketing.

6. Use marketing automation technology

The marketing automation market is expected to be worth $6.4 billion by 2024. There’s a good reason this market is growing so quickly — these tools can help marketers accomplish more with less and maximize ROI by making marketing processes more efficient and precise.

Marketing automation tools can take care of repetitive tasks and analyze data to help you improve your campaigns. For example, email automation tools can send emails to prospects at pre-determined time intervals or when they complete certain actions on your site.

Since your team doesn’t have to send these emails manually, these automation tools can save them significant amounts of time. Marketing automation can also help in numerous other areas, including content personalization, lead tracking, and audience segmentation.

7. Run experiments frequently

One of the best ways to increase marketing ROI is to experiment frequently and use your findings to improve your campaigns.

Try out new channels and make adjustments to your campaigns to see what works best for your audience and goals. A/B testing is an excellent way to test and refine your campaigns.

It involves creating two or more versions of a piece of content, say an ad, email, or web page, and showing each version to a different randomized group of users.

Throughout the test, you track clicks, sales, or whatever digital marketing ROI metrics are important to your campaign. At the end of the experiment, you check your results to see which version performed better. You can then make the best-performing version the permanent one and go on to test another aspect of your content or campaign.

WebFX helps companies like yours reach their business goals

“Our marketing department has a lot of key performance indicators that WebFX has always helped us achieve… WebFX has always worked hard to make sure that we’re getting what we need out of the partnership, not just what may seem like the best result.”

HydroWorx

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Frequently asked questions (FAQs) about marketing ROI

What is marketing ROI?

Marketing ROI is a measure of a marketing campaign’s profitability. It lets businesses analyze the performance of their marketing efforts and determine whether they are profitable. This data informs budget allocation decisions and optimizes future marketing efforts.

How do you calculate marketing ROI?

You can calculate ROI by dividing your total costs by your net profit, which is your costs subtracted from your profit. You can then multiply by 100 to get a percentage. The formula looks like this:

((Profit – Costs)/Costs) x 100 = ROI

So, for example, if you invested $1,000 into a marketing campaign, and you earned $2,000, your calculations would look like this:

(($2,000 – $1,000)/$1,000) x 100 = 100%

Your marketing ROI tells you how much money you’re making or losing due to your marketing efforts. It effectively shows you whether your marketing tactics are working.

How do you increase marketing ROI?

Here are the steps you can take to increase your marketing ROI:

1. Set ROI goals
2. Make an ROI tracking plan
3. Focus on high-performing channels
4. Analyze and optimize
5. Focus on metrics that matter
6. Use marketing automation technology
7. Run experiments frequently

Refer to the detailed information to learn more about each step.

What is the significance of tracking ROI in marketing efforts?

Tracking ROI in marketing initiatives is essential since it helps you assess the efficacy and success of your company’s marketing operations. By measuring ROI, you can determine which techniques produce the best results and appropriately allocate your company’s resources. Furthermore, analyzing ROI assists your team in making data-driven choices, optimizing marketing efforts, and eventually increasing overall profitability.

Which technology is the best for measuring and increasing marketing ROI?

RevenueCloudFX is one of the top technologies for measuring and increasing marketing ROI. It provides cutting-edge analytics and tracking capabilities, enabling you to precisely assess the effect of your business’s marketing initiatives and make defensible decisions in light of the information. Additionally, RevenueCloudFX offers tools for personalizing marketing campaigns — A/B testing and targeted advertising — that may enhance your company’s ROI even more.

Increase your marketing ROI with WebFX

WebFX is a prominent digital marketing agency specializing in maximizing marketing ROI through efficient online marketing techniques. With a team of seasoned experts and a track record of success, we have the abilities and tools to support your company in thriving in the cutthroat internet marketplace.

We can develop a comprehensive marketing plan to match your specific goals and provide measurable results — to boost website traffic, improve conversions, or raise brand recognition. Got questions?

Contact us online or call 888-601-5359 to speak with a strategist today!