If you’ve worked in Marketing for even a short period of time, you’ve probably come across the term ‘Marketing ROI’. There’s a lot to dive into about marketing ROI and how you can calculate it, but we’re going to assume you know this (if not, you can always check out our blog). Maybe your boss has tasked you with reviewing your ROI, or the numbers look a little lighter than you’d like. Still, usually, at some time shortly after calculating marketing ROI, you’ll inevitably need to try and make that number better. That’s the nature of business, after all; how do we improve YOY and ultimately make a little more £££.
In this article, we’ll dive into what a good marketing ROI actually is (spoiler: there’s no right answer) and some strategies that may help you improve Marketing ROI.
Marketing ROI Analysis
By meticulously measuring and analyzing marketing ROI, you gain invaluable insights into the effectiveness of your marketing efforts. Really breaking down your ROI and understanding what has caused your results empowers you to:
– Identify high-performing campaigns: Pinpoint the strategies and tactics that resonate most with your target audience.
– Allocate resources wisely: Shift the budget towards channels and campaigns delivering superior ROI.
– Optimize for future success: Refine your sampling strategies based on proven performance metrics.
Embracing marketing ROI analysis is not just about numbers; it’s about unlocking the full potential of your campaigns. By harnessing the power of data, you can make informed decisions and drive revenue growth, even when your marketing investment changes.
Setting Marketing ROI Benchmarks
Once you’ve measured marketing ROI, as a whole or for a channel, it’s important to give it some meaning. Most people lean towards asking, ‘What is a good marketing ROI?’. We think it depends on the channel/s you’re analysing and historic performance – has ROI improved over time? Can you see a specific improvement when you started a new strategy or started investing more heavily in the channel?
You can also put your ROI in context by researching average marketing ROI for different industries. Places like Statista (who have for example, research available on ad campaign ROI, email marketing and digital marketing in 2023) are great places to start but you’ll likely need to work with some kind of market research agency to get more accurate and recent data. You can do some guesswork with competitors’ ROI, based on any estimated ad spends and revenue you can find, but these aren’t likely to be very accurate.
In terms of what is good marketing roi generally, many marketing experts define good marketing through a ratio, so actual numbers vary for every business and your sales’ model. A ratio of 5:1 is thought to be good – if you’re over this, then great, and lower may also be fine, but difficulties arise around a 2:1 ratio. This isn’t high profitability with other expenses considered (e.g. salary, tools), and means you’re barely covering the cost of your product and marketing.
Improving Marketing ROI
So now you know whether your marketing ROI is actually good or if it really should be making you sweat, let’s get tactical about improving it!
Be clear on your goals and audience
There are many objectives you can aim to affect in marketing. Campaigns and activities centred on driving brand awareness will almost certainly have a low ROI in terms of product because they’re not meant to drive sales! If, for example, you can find a way to determine the impact or return on investment via changed brand perception (e.g. by sending out surveys on your brand to customers) before and after the campaign, you’ll be much more accurate.
If you’re definitely looking at the metrics to meet the right goals but you can’t understand why it’s not working, go back to basics. Why should your customers care about your marketing? Are you talking to any audience that will listen, or are you talking to the decision-makers who will buy your product? You won’t be able to identify this accurately across all platforms, but if you’re truly stuck, go back to square one and try putting yourself in your ideal customer’s shoes. Getting to know them as well as you can through data will serve you best.
Mine your previous data and campaigns
Look holistically at what has worked across your marketing in the previous year. Undoubtedly you have parts of your website that gain more traffic, posts or emails that get more engagement over social or email, and ads that resonate more or less with your audience. Try to correlate what is working well for you across your high-performing areas, and see how you could change this into revenue.
Count your expenses
If your ROI seems out of sync with actual business results, for example, if you look like you’re doing great but struggling to meet revenue targets, look at your overhead costs. Establishing what it actually costs for you to produce a campaign or a piece of marketing across all the people and platforms, you need will make your ROI more accurate. For example, are you continuously having campaign meetings with an invite list for as long as your arm, or do you need multiple people to sign off on a single piece? If you can strip back the number of people involved in your campaign, not only will you likely save time and create better outputs (we know you know what we’re talking about), but you’ll save on the overall cost of the campaign from personnel’s or your agencies paid time.
Test and learn
Experimentation helps you identify growth opportunities and provide valuable insights. For example, you can test one tactic, message, or design with one target group and simultaneously have no action with a control group. A/B testing in this way allows you to see which ideas could work best across your target audience, without investing too much time or budget upfront. Elements you can A/B test with across marketing include:
– Calls to action
– Headlines
– Fonts
– Website layout, design and copy
– Navigation links
Stuck for ideas? Ask your customer!! Improve your feedback mechanisms on social media or email or your relationship with the consumer insight or analyst parts of your business, whether this is sales, marketing, or customer service—someone is always a customer expert
Another good way to find inspiration is to look at your competitors. While you should have a clear view of what your direct competitors are doing, you can always consider looking at leaders in yours, similar or even marketing leaders in totally unrelated spaces. We often find that product sampling or brand activation tactics is a technique utilised by many companies across FMCG, drinks and cosmetic/beauty spaces so it’s really about designing a campaign that’s more cost-effective and drives better results than previously. There can be many reasons that a sampling or activation campaign didn’t take off the first time, but with our experts, data and exclusive UK-wide partner network, we work our hardest to ensure you see superior results.
Our Top Tips for Improving Product Sampling ROI
We have mentioned something about the subject before, but as a product sampling agency, we know a thing or two about creating an effective sampling campaign. So, with the frustrations of defining and measuring the ROI of product sampling aside, we asked our experts for some quick tips that they often share with clients to make the next campaign even better:
– Target the right audience: Ensure samples reach consumers most likely to convert.
– Optimise sampling locations: Partner with high-traffic, relevant venues for maximum brand exposure.
– Track customer engagement: Utilize digital tools and surveys to measure sample interaction. Here at Relish, we have our own Consumer Insights survey we’d be delighted to talk to you about!
– Invest in post-sampling nurture campaigns: Retarget engaged customers with targeted offers and information.
Improve Marketing ROI with Product Sampling
By prioritising accurate marketing ROI analysis, businesses can prove the tangible value their campaigns bring to their bottom line. With these insights, you can refine campaigns, maximise effectiveness, and continue to grow your revenue.
Ready to unlock the true potential of product sampling for ROI? Contact us today to discuss how we can help you craft data-driven sampling strategies for impactful brand experiences!
