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Tracking Your ROI (Return on Investment) – Find Out Which Investments are Worth It
By John Holland of JH Studios, Inc.
As a business owner, how are you keeping tabs on where your marketing dollars are going? When someone calls to inquire about your services or calls to place an order, do you ask how they found you? Neglecting to do this is a common mistake that far too many business owners make. Without asking this simple question, whether directly or in the form of a questionnaire, you miss out on the importance of marketing return on investment, also known as marketing ROI. This is the measurement of your cash inflow against your investment outflows. By monitoring leads, you know where to put your future marketing dollars to generate the most income. When investing in any marketing effort, no matter how small, always find out from each customer how they found you. If you know where your customers are coming from, whether the web, a magazine ad, a TV or radio commercial, door hanger or postcard, you will be able to know which marketing efforts are working for you and which are not worth the money and effort. Marketing return on investment and tracking ROI allows you to invest your marketing dollars more effectively from day one. Every company, from the top leaders in the market to a one-man show, should be tracking ROI. When it is calculated properly, ROI percentages can be very helpful in achieving the greatest return on your marketing efforts. The first reason to calculate your marketing ROI is to determine if you meet your ROI hurdle rate, which is the minimum ROI you need to break even on any investment. Second, if you have more than one marketing technique, which almost every business does, you can rank them in order of profitability by monitoring leads and focusing more of your time and energy on what is bringing in the greatest income. You can also participate in marketing return on investment to predict your profits on a new project. Tracking ROI can help you decide whether you want to make the effort to market a new product or not. Make sure that you rely on more than simply the percentage you calculate. If the numbers do not stack up against the figures you calculated, you may need to make a change in how you go about monitoring leads. This may seem like a tedious task, but when conducted accurately, your efforts of marketing ROI will create an income you can certainly live on.
John Holland is the founder of JH Studios, Inc, a web design and marketing firm in Tampa, FL.
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Thanks for the insights, John.
Not ever having been in business for myself, I found it very interesting that this was being done. It sounds like a most sensible idea.
Great intel!
The copyright for this content entitled "Tracking Your ROI (Return on Investment) – Find Out Which Investments are Worth It" has been specified by the contributor as:
Creative Commons Attribution-Share Alike 3.0
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http://jhstudios.qondio.com/
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