Congratulations for getting this far. You are now on the final stage of the ‘L.E.G.O principle for marketing success’. The ‘O’ in L.E.G.O stands for Observe. Don’t think you can sit back with your feet up. It’s the opposite, in fact, you need to keep your foot on the gas!
Over the last few weeks, you have been thinking carefully about how to plan out your first marketing campaign. You’ve thought about what you want the campaign to achieve, who you are targeting the campaign at and how you are going to deliver the campaign. The final stage is to focus on delivering an ROI – return on investment.
Observe is probably the most critical part of the L.E.G.O principle and this article discusses how to calculate the reach of the campaign.
What is ROI in marketing?
To keep it simple, ROI in marketing is the financial value that can be attributed to a specific marketing activity minus the cost of the campaign.
Why is ROI in marketing important?
Every activity that you carry out for the business needs to have a purpose and an accountable outcome. For instance, if a new supplier comes to you and say’s they can save you money on a particular product range, you wouldn’t just take their word for it, you would want to know how much money they could save you.
The same process needs to be applied to marketing. Don’t invest in marketing because ‘everyone else is doing it’, do it because you want to achieve a specific measurable goal.
How to measure ROI?
The great thing about marketing is that everything is measurable in some form or the other. Online marketing is much easier to measure and it can be done in real-time, whilst offline (not internet based marketing) takes longer to measure.
For example, if you purchase signage that is to be used on a side of a vehicle, you can not measure how many people will see it. But, if someone sees it and contacts you saying that they saw it you can calculate the ROI by; how much you will earn from the work – cost of signage = ROI.
Calculating ROI with online marketing is easier, and many applications have this build into their systems. Google Analytics and all social media channels will tell you how many people saw your ad and clicked on the ad. This tells you the cost per CPV (cost per view) and CPC (cost per click).
So if your Facebook ad budget was £10.00 and it got 20 clicks your CPC would be £0.50.
If one person who clicked through from the ad engaged your services and you made £200.00 from them, the ROI is £200.00 – £10.00 = £190.00.
How do you measure ROI from a blog post? This is harder but not impossible. The option is to ask people how they found you. Nobody will mind telling you, it is common practice these days. Even better if you have a contact form on your website make this an option that they have to fill in before they can send the form.
Whatever marketing action you carry out, remember to do the following: plan, create and measure.