By Emily Short
In today’s business environment, measuring and communicating marketing ROI (return on investment or MROI), or return on marketing investment (ROMI), is more important than ever. With pressure on marketing and sales teams to prove the efficacy of their marketing efforts, ROI is key to providing quantifiable data on what’s working and where there’s room for improvement.
Marketing ROI helps illuminate what marketing efforts are working, where future budget should be allocated, and what campaigns drove customers. To accurately measure MROI, marketers must ensure they have clean data, clearly defined revenue metrics, and closed-loop reporting.
What Is Marketing ROI?
MROI compares the revenue benefits of a marketing campaign to its cost to determine ways to increase earnings. ROI is the difference between the revenue generated and the cost of marketing, divided by the marketing cost to give you the return on investment percentage.
ROI = (Revenue Generated - Marketing Cost) / (Marketing Cost * 100)
The higher the ROI growth percentage, the more revenue a campaign drove. On the opposite end, a low or negative ROI indicates that the cost was high or outweighed the revenue it generated. There are several methods of marketing ROI attribution, each with its own merits. Attribution models influence how content is weighed to determine what led to a lead’s conversion. It's important to consider what your company values concerning crediting conversions and the associated revenue.
Tactics to Increase Marketing ROI
How do you go about increasing your marketing ROI? Improvements fall into several categories:
Use Data to Drive Decisions
Proving ROI requires leveraging data analytics to give companies the tools to make informed decisions. Data-driven decisions are the bedrock of a successful marketing strategy. In today's landscape, where every marketing dollar spent must yield measurable results, the role of data cannot be overstated. By analyzing key performance indicators (KPIs) and metrics, you gain valuable insights into what's working and what needs adjustment.
Whether tracking the conversion rates of different customer segments or assessing the impact of A/B testing on your campaigns, data empowers you to fine-tune your efforts. It enables you to allocate resources effectively, identifying high-performing channels and optimizing those underperforming. With data as your compass, you can steer your marketing initiatives toward achieving that coveted QoQ increase in marketing-sourced revenue, all while delivering tangible proof of your ROI.
Make It Personal
Segmentation and personalization are critical tools for creating a unique experience for your potential customers. Remember, you’re marketing to another human; for your content to resonate, it must feel authentic and specific to the user. Segmentation allows you to categorize your audience into distinct groups based on their behaviors, buyer persona, lifecycle stage, and needs.
Once you've segmented your audience, personalization takes center stage. By tailoring your messaging, recommendations, and offers to each segment, you can speak directly to their needs and interests. This boosts engagement and fosters a sense of connection and relevance, making your potential customers more likely to convert. In a world flooded with generic marketing messages, segmentation and personalization set you apart, demonstrating that you understand your audience's individuality and are ready to meet their unique needs.
Optimize, Optimize, Optimize
Optimizations are vital to streamlining your marketing funnel and finding areas of improvement. Don't expect monumental changes overnight; instead, focus on making minor, continuous improvements over time. A/B testing is your ally in this journey, allowing you to experiment with various elements and identify what resonates best with your audience. But the optimization process doesn't stop there.
To truly boost your QoQ increase in marketing-sourced revenue, you must also streamline the customer journey and continue to make improvements over time. Dig deep into analytics to identify where people are falling off the path to conversion. Whether it's a complicated checkout process or unclear messaging, fixing these bottlenecks can yield substantial returns. In the world of marketing, every small improvement counts, and the cumulative effect of these optimizations ultimately leads to success.
Feedback is a fundamental step in the journey of increasing quarter-over-quarter marketing-sourced revenue. It's not enough to rely solely on internal discussions with your marketing team because our perceptions of what the audience wants may not always align with reality.
To gain valuable insights, engage with your customers and leads who have experienced your marketing process. Ask them questions like, "What could've gone better?" This question opens the door to constructive criticism, allowing you to identify pain points and areas for improvement.
Additionally, inquire about what content they found particularly helpful or attention-grabbing. The responses can guide you in refining your content strategy. Equally important is asking, "Where did we fall short?" Honest answers to this question reveal opportunities for optimization.
Gathering feedback from your audience is not just about collecting data; it's also about listening, understanding, and using that information to innovate and create better solutions to promote your business. By actively seeking feedback and acting on it, you demonstrate your commitment to delivering value and ensuring the continued growth of your marketing efforts.
How to Increase Quarter-Over-Quarter Marketing-Sourced Revenue
These tactics are starting blocks to create quarter-over-quarter increases in MROI. In the quest to increase quarter-over-quarter marketing-sourced revenue, success hinges on a well-structured plan, close collaboration between marketing and sales teams, and a commitment to data-driven decision-making.
Remember, the journey to growth is ongoing, and it starts with setting realistic quarterly goals based on historical data. Regularly monitoring and adjusting your strategies based on performance metrics is crucial, allowing you to scale successful tactics and explore innovative approaches.
Customer feedback and satisfaction play pivotal roles in driving revenue growth because happy customers often become loyal advocates. Consistent growth in marketing-sourced revenue is the ultimate goal, and achieving it requires regular reporting and transparent communication to track progress and maintain momentum. By following these principles and embracing the power of data and collaboration, you can pave the way for sustainable and rewarding QoQ increases in your marketing-sourced revenue.
Discover how you can better report on your marketing efforts to drive increased ROI with An Ultimate Guide to Perfecting Your Marketing Attribution Reporting.
About the author
Emily Short Emily is a Senior Marketing Specialist at SmartBug based in Tucson, Arizona. She has 5+ years of experience in marketing and sales. She is passionate about helping brands better reach their users and improving the customer experience and has been featured in local, digital, and international publications. She holds a BS from Colorado State University and is currently a Marketing MBA Candidate at the College of William and Mary. Outside of work, Emily enjoys escaping in a good book, traveling, and painting. Read more articles by Emily Short.