These days when it comes to Digital Marketing we pretty much have the ability to measure anything we want. The bigger challenge is deciding is what really matters. I often here the questions.
How do I prove my marketing value? How do I calculate ROI? What do I measure?
The amazing thing is the answer is simple, but most businesses and marketers miss it:
“Show me the money!”
Ultimately if what you are doing online does not make or save you money, is it really worth it? Traffic alone does not translate to money. You need people to convert in some way for there to be value. Then you can track your ROI (Return on Investment).
Once you understand this there’s a simple formula. To get started you need are two metrics from your sales team. How much is a new sale worth and your conversion rate from leads to sales. With this information, apply the formula outlined below.
If you start from the bottom and move up; What’s your ROI and what do you need to do to win 10 new clients?:
- Determine or define the average value of a new client or sale. (Let’s use $1,000)
- Next if you know your average conversion rate (Let’s use 50%)
- Now you can figure out how many leads you need to get 10 sales. (In this case it would be 20 leads)
- Then figure out the percentage of visitors that become leads. We’ll use 1% here. So then you need 2,000 visitors.
- So finally, use digital and online marketing tools to drive 2,000 visitors to your website and record the cost to do this.
Using this formula you’ll be able to see exactly the return on your online marketing investment!
And no more wondering what to track.