To have a successful business, any campaign you employ should have a positive return in that campaign’s investment. Without such, it won’t be too long before your business starts flirting with the idea of bankruptcy. And because that’s a conversation no business wants to have, understanding how your marketing strategies contribute to your bottom line is pivotal to keeping your financial head above water. So to help you better determine if the marketing strategies you’re using are actually proving to be beneficial to your company, here are three questions to ask regarding marketing ROI.
Does It Increase CLV?
One great question to ask regarding your marketing campaigns is how it affects the lifetime value of your customers, or CLV. According to Marketingmo.com, a customer’s lifetime value is equivalent to the amount of profit you receive from one single customer over the entire time they’re doing business with your company. You want this number to be as high as possible. So if you begin to realize that one of your marketing strategies isn’t encouraging customers or clients to spend more money with you over time, you may want to focus your energies elsewhere.
Is Your Profit Increasing?
While many marketing managers or CMOs keep their eyes on return on investment as the end-all, be-all number to determine if a marketing strategy is proving successful, Daniel Kehrer, a contributor to Forbes, actually recommends for businesses to be more concerned with increasing profits rather than just having a positive return on one specific marketing investment. Kehrer states that focusing your efforts on increasing the right metrics for your business—overall profit—can help your company move from being merely efficient in your marketing efforts to being more effective.
How Does the Cumulative ROI Look?
All marketers know that marketing success isn’t something that happens at a rapid pace. Especially in today’s ultra-competitive markets, consumers often have to have multiple touches with your brand over a period of time before a purchasing decision is made. Because of this, Andrew Beattie, a contributor to Investopedia.com, suggests for CMOs to
In order to be a successful marketer, you have to know how to get a good ROI on your marketing strategies. To help you find the answer to your ROI questions quickly and easily, use the tips mentioned above to determine whether or not a specific marketing campaign is working for you.
Originally posted on June 15, 2016 @ 2:14 pm