How to Maximize Your Online Marketing Return on Investment?
July 18, 2014 Sarvesh Bagla
A small business, or any business for that matter, will always look for suitable and successful online marketing techniques. Campaigns are run, specialists are employed, and a vast variety of tools used to bring attention to the business. With all this action going on, it is very much possible to lose sight of a very important objective, the Return on Investment, or ROI as it is often called.
When we discuss metrics and ROI with the managers, executives, and specialists, we are often asked this question: How does this apply to small business? True, large businesses routinely focus on measurements, metrics, and ROI. There are departments, functions, and people with titles of analytics, metrics, evaluation, research, organizational effectiveness, and other labels that just do not exist in a small business. So how should a small business address ROI beyond calculating the ROI for capital investments, which they often know quite well?
Source Jack and Patti Phillips
ROI is one set a business can never lose sight of. While larger businesses might run campaigns that do not have an impressive ROI, for a small business, the cost can be prohibitive. Most small business of course do not have the luxury to take monetary hits and losses. Campaigns can bring your customers and a good cash flow, but it is profit that a small business wants. It’s all the more reason for you to sit up like a hawk and keep a keen eye on your Return on Investment. It is always important to keep the essentials in mind, and analyze how well they are performing.
Lead generation is what a small business will spend most of its money on. Prospective customers need to know that a new business exists, and the owner needs to drive consumers to the business. This of course goes beyond a new business, because as long as a business exists, even if it has a comfortable customer base, it is always advisable to have the business grow steadily.
Word of mouth is the strongest idea for small business lead generation. A recommendation from a friend or someone known is way more is stronger for the customer than any campaign a business can run.
This essentially involves the idea of retaining a customer. Experts suggest that the cost of gaining a fresh lead can cost as much as six times when compared to a returning customer. Every single time a customer returns, your profit increases. Their recommendations for your business help bring in more customers, and more business. Having customers generating sales leads for your business is about as good as things get.
Learn here: How Can ecommerce Startups Increase their Sales Exponentially?
Imagine having a sports goods store. A customer arrives, likes your business, and buys some gear from you. If the person enjoyed the shopping experience, they will return every time they need more gear. They might recommend your business to friends and teammates, or the teammates might themselves develop an interest in the gear and enquire about your business. Presto! You have received strong sales leads without having to invest large amounts, or running several programs.
Of course, a smart business owner also knows that having just one strategy or all eggs in one basket, as it were, is not a good model. It would be wiser to consider, and invest in on other lead generation tactics as well.
It’s a small world, and the internet is the tool where people often look for goods and services, before they actually visit a business. Most of this is accomplished by an internet search for the service required. Irrespective of whether the customer is making use of the almighty Google, or its lesser nemesis Bing, you want your business to show up as high in the search results as humanly possible.
Data suggests that people will not scroll much on the search page to look for a result. Moreover, the impact decreases dramatically if you are not on the first page of the search results. Search Engine Optimization or SEO Services are employed to make sure your page shows up higher in search rankings. Once the prospective customer clicks the search link and visits your website, it is time for lead conversion. Changing a prospective customer into an actual customer is hard work, and the conversion rates are often low.
Even so, SEO is widely employed, and an excellent tool for getting the best ROI, only next to word of mouth advertisement. Cost per lead is very efficient, and the returns do steadily increase for the patient business.
SEE HERE: Our ecommerce SEO services to grow your online business and SEO Packages for increasing your visibility on the web
PPC, or Pay Per Click is a format many small businesses employ in their initial stage. It is basically advertising based on a fixed price for every click by a prospective customer. It can be useful in steering the somewhat inexperienced customer to the business. Once in decline, PPC is now increasingly important. Especially so, since search engines like Google now show PPC links with their search results.
Imagine the same sports goods store from our previous example. When someone near your business does an internet search for a sports goods store, or for sporting equipment, good SEO on your website will show your business at the top of the search results, and increase the likelihood of the customer visiting your website. Augmented by the right keywords and PPC, you could ensure that your business will feature on the top of the search page, further increasing the chances of the customer visiting the store. Additionally, you might also use PPC on popular blogs and websites for added exposure.
SEE HERE: PPC Packages for increasing more leads in short period.
Social media is a huge driving force in society and business. Run a campaign for social media, have a Facebook page for your business, and try to drive consumers to your online social media presence and as a consequence, to your business. Measuring direct ROI from social media is a tough job to say the least, but it does get eyeballs for your business and gives it some recognition.
Having positive words from customers on social media, and recommendations from their online friends, are very likely to encourage a positive outlook on your business. When we say social media, it is websites like Facebook and Google Plus that would have an impact on your ROI, you could also encourage happy customers to write reviews on other social platforms like Yelp, Zomato, Foursquare, and Google Plus Local.
SEE HERE: Social Media Packages for increasing more leads in short period.
Once all powerful and widely employed, email marketing has fallen out of favor lately. And it’s a shame, because email marketing has a pretty impressive ROI. The trick here is not to use emails to spam the inbox of the customer, but to engage the willing user after their address has been acquired by other campaigns like SEO, PPC, and Social Media.
It is an age-old technique, but also grossly overlooked. Integrated, long-term strategies go a long way with email marketing. The plan must be to keep the customer informed and engaged, not wary of emails from your business.
Imagine our hypothetical sports goods store is having a sale, or we added something new to the inventory, topped up with some limited edition items. An email to the customer will remind them of the store, and inform them of the new event. The customer is likely to checkout the merchandise and makes a purchase from the new stock. Alternatively, if it is a sale, the customer may choose to stock up on some common use items.
Brand Strength and Recurring Revenue
Brand recognition is an investment in itself. Potential customers are likely to be more favorable to the business whose name they have heard before. This is why you see major corporations suing left and right over their brands and trademarks. Brand recognition is an ROI in itself, the better your brand is recognized, the easier lead generation.
In a similar vein, having a loyal customer base is excellent, and many businesses would actually strive for a position like that. What is desirable however, is not just recurring revenue from your loyal customer base, but an expanding set of customers. A healthy business must keep up its growth for maximizing ROI.
In consumer products recurring revenue comes from repeat purchase. Maybe you bought the product once because you liked the packaging. You buy it again because the product performed. It’s not enough, of course, to look to recurring revenue; the question is how frequently that revenue will recur.
Source: Ryan Caldbeck at Forbes
Rigorous and thoughtful accounting is something us small business owners often miss. Several plans are run and we do often end up comparing the ROI of these plans individually. Individually each of these may have performed very well, but the ROI overall just went for a nice dip under water as a result of short term accounting and book-keeping.
Let us take a look at the successful sale we just had at our sports goods store. Encouraged by our email and PPC campaigns, some customers decided to show up and bought several products at discounted rates. Cash flow was excellent and we now have a tidy sum in our hands. Going through the accounts, we see that the baseball bats we sold for $55 each in the sale, were bought for $57 a pop for our inventory last year. We do have a tidy sum on our hands, but the ROI is in the gutter.
Starting a business demands an investment, and the ROI on these investments must show up in operation. Hopefully, these tips on generating sales leads will help in the growth and development of your business. As another reminder, remember never take your eyes off the prize that is Return on Investment. With several activities going on, it is quite likely that you will find yourself distracted in keeping track of your investment. It is however imperative for a small business to keep a hawkish eye on the ROI, both short term and long term. Devise your strategies in a way that cover all basics needed to achieve a successful ROI.
See also: Stop Wasting Time and Start Video Marketing