Measuring ROI

With the end of the first quarter quickly approaching, it's important for business owners to step back and evaluate the return on investment for the marketing strategies they're using to generate new business. It's not difficult to do, but many will leave this task undone thinking they have a general idea of what's working well. Others may be so overworked, they don't have the extra time in their schedule.

What you don't know, may be hurting your business. Taking the time to formally measure ROI (return on investment) will let you know where your money is being invested wisely and where it's being wasted. Thinking you have a general idea is a lot different than actually seeing the figures on paper. The results may even surprise you!

Our marketing clients are required to ask all new customers how they heard about them. When a new customer calls or comes in, this information is hand-written on a very short form along with the gross dollar amount of the sale. At the end of every quarter, we take that information and tally it up against what they've spent on each marketing strategy.

When these clients first implemented this tracking program, they were amazed at what the data showed. Strategies they thought were bringing in a lot of business were, in fact, not performing the way they should. After six months of tracking, we were able to eliminate the strategies that weren't working and expand on the ones that were performing well.

In summary, every savvy business owner should be implementing formal strategies to measure the ROI on their marketing. When you do, you will be able to capitalize on the strategies that are performing and have more funds available to test and measure new marketing strategies.