How to Create an ROI Marketing Strategy for a Digital Business

When was the last time you looked at your ROI marketing statistics? If you’re like a lot of business owners, you probably haven’t done an ROI analysis.

Verizon reports that about 44% of businesses track search engine marketing ROI. You can assume that they don’t track the ROI for other aspects of marketing, too.

If you have a digital business, you’re relying on digital marketing strategies to get your brand out there and to generate business.

You have access to all of the data you need. The problem is trying to make sense of it all because there’s a report for every part of digital marketing.

There’s no need to get overwhelmed anymore because we’ve got you covered. Keep reading to discover what you need to do to create an ROI marketing strategy for your business.

1. Set Your Marketing Goals

Do you know what your marketing goals are? They should be similar to your business goals.

Your marketing goals help you decide the rest of the marketing strategy for your business. Make sure your goals are written out so they’re measurable.

2. Choose Your Marketing Tactics

What marketing tactics will you use? This depends on the type of digital business you have and your target market.

A B2B digital business might need to rely on inbound marketing with cold calling. A consumer business could use social media and other tactics.

Be sure to research your target market to understand the best ways to connect with them online and offline.

3. Take Baseline Measurements

You need to take baseline measurements. This helps you measure ROI marketing improvement. It also helps you decide the most important metrics to track.

If your goal is to increase sales, you don’t need to look at website traffic and social media followers. You’ll look at the later stages of the buying cycle.

You’ll need to measure conversions, appointments, and closes. These can get measured online through Google Analytics and CRM reporting tools.

If your business relies on cold calling, put a cold calling ROI calculator to use.

4. Calculate Customer Lifetime Value

The lifetime value of a customer is the total amount of money a customer spends with your business. This is good to use because it tells you if you’re spending too much on marketing.

If the cost to acquire a customer exceeds the lifetime value, you’re losing money. The goal is to increase the lifetime value of the customer while lowering the acquisition costs.

5. Learn the Cost Per Acquisition

One of the measurements of marketing ROI is the cost per acquisition. You know exactly how much it costs to acquire a new customer.

It’s an easy calculation. Total the amount of marketing dollars spent for a defined period and divide it by the number of new customers.

6. Decide Your ROI Marketing Attribution Model

The reason why marketing ROI is difficult to measure is that there are a lot of sources that can drive traffic and sales to your website.

You can’t figure out which source was the main source of the sale if there are multiple possibilities. That’s why there are different attribution models to measure ROI.

The attribution models assign a percentage of the value of the sale to the marketing tactic. For example, using the first-touch attribution model, the marketing tactic that drove the first visit to your site gets the credit for the sale.

On the last-touch attribution model, the last marketing tactic that closed the sale gets the credit for the sale.

In one scenario, a customer could have learned about your business through social media. They visited your website, and a few days later decided to make a purchase.

The person looked up your business in a search engine, visited, then purchased an item.

In the last touch attribution model, you’d give 100% of the sale’s value to search engine marketing to calculate ROI. In a first-touch model, the social media channel gets 100% of the sale for the ROI analysis.

There are advantages and disadvantages to each. In a first-touch model, you measure the top of funnel activities. Attention is only on leads, not sales.

The solution is to use multitouch attribution. This is where you can split percentages between different marketing tactics.

Here’s how it would look in the example above. Let’s say you gave 10% of a sale’s value to social media, 50% to search engine marketing, and the rest to other tactics like email marketing.

You can measure the ROI by multiplying the percentage of the value by the total sale. Wicked Reports’ multi touch attribution companies models help your business increase marketing ROI. 

7. Understand the Weaknesses of the Model

When you look at marketing metrics, the data doesn’t lie. The way we interpret data can distort the story. You could make assumptions that create a rosy picture instead of a harsh reality.

Let’s say that you use last-touch attribution as your ROI model. You’re assuming that there were no other influences that made the sale.

Customers usually require several touches before they make a purchase. You have to assume that there were other factors at play when calculating ROI.

How to Conduct an ROI Analysis for a Digital Business

As a digital business, you rely on digital marketing to capture leads and clients. The great thing about digital marketing is that you have access to all the data you need to do an ROI analysis.

The bad news is that there’s so much data, you can get overwhelmed finding the right ROI marketing statistics. You don’t have to worry about that any longer.

You just learned how to make sense of all of those metrics and choose the right ones for your business goals. Your digital business is ready to thrive.

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