Brands around the world are turning towards digital media for marketing their products. It has been proven to be a substantial market in today’s day and age. One of the reasons why it is better than traditional marketing is the measurement of accurate ROI. ROI or Return On Investment in simple words is the measurement of either profit or loss that a brand has incurred on its digital marketing campaigns with respect to the money it has invested. It essentially tells you if the marketing campaign is worth your money or not.
The ideal scenario is when a business earns revenue more than the cost. It is vital in every digital marketing strategy to measure ROI because without it you are just shooting arrows in the dark and expecting them to hit something. In other words, if you don’t measure the ROI, you won’t know what’s working and what isn’t. Once you know that, you can spend your money where it is profitable.
There are different metrics to measure said ROI. Some of those examples are given below:
- Social Media Platforms: Impressions, engagements, CTR (click-through rate), conversions, leads, page likes or followers, etc.
- Website Landing Pages: Traffic, total page views, unique visitors, returning visitors, time spent on a page, actions taken, conversions, etc.
- Email Marketing: Open rate, bounce rate, unsubscribe rate, conversions, leads, etc.
- Blogs: Traffic, clicks, unique visitors, returning visitors, time spent on a page, actions taken, conversions, etc.
Now a good digital marketing ROI is 5:1. It is revenue to cost ratio. For every 1 dollar spent you should get sales of 5 dollars. This ratio is considered standard for most businesses and they should strive to achieve it. Apart from that, a 10:1 ratio is possible in some situations and for some brands but that shouldn’t be the expectation. The ratio depends on the cost structure, target audience, industry, etc.
5:1 ratio should be considered a minimum for most businesses. Some businesses can make it with 2:1 but most can not as the cost to produce or the cost to acquire goods are higher for them. Imagine the cost to produce is 100 Rs. and you spend 100 Rs. in marketing. By 2:1 ratio, you generate 200 Rs. in sales but then you are only breaking even. It is not profitable.
Getting good ROI is an ultimate goal and some brands successfully attain it but many a times some brands struggle to achieve it. Low ROI damages the brand as it is losing money on the campaign itself. Many brands argue that they have the best digital marketing team but still they get low ROI. Let’s see some common reasons as to why you get low ROI in spite of having a good digital marketing team.
1. No clarity on audience or goals
The very first thing you do when you make a digital marketing plan is have a clear goal in your mind with a specific target audience. When you know your audience, you can show them content they can relate with and that helps attract the right audience to your page. Similarly if you have a clear goal in your mind, you can head in the proper direction. Goals can be traffic, followers, engagements, leads, etc. If you want engagement but the content is more suitable for getting more traffic then it is useless. So before anything else, you need to understand your audience and goals and communicate that with the digital marketing team.
2. Need to please everyone from the get go
It is said by many marketing experts that if you try to be everything to everyone, you’ll end up being nobody to no one. You have to pick an audience. You can not please everyone right from the beginning. Your content must be target audience-specific. Your customer base might be diverse but your campaigns must be specific. You can not please your whole customer base with one campaign. That is why you create different campaigns for different people. Define your target audience first. Understand who they are and what they want. Make the marketing plans accordingly.
3. Quantity vs Quality
Many businesses fail to understand the effect of quality and quantity. For example: one content per day vs one content per week has different effects. They work differently for different businesses. You can not have a number in mind and try to achieve it even if it is not profitable. They are both fine if they are benefitting the brand. The focus should be creating valuable and insightful content. If the content is not relatable or valuable, it won’t matter if you post daily or not.
4. No focus on Customer Retention
It is always more expensive to acquire a new customer than retain an old one. But many times brands focus more on new customers than old. They want to convert more and more customers but they are not doing anything for the existing customers. They are not giving anything new for the customers they already have. It leads to losing them gradually. If that goes on for a while, there comes a time when you are losing more customers than you are acquiring. This leads to low ROI and loss of money.
So what we can understand till now is, ROI is a simple concept but it drives the business up or down. It essentially dictates the success of your marketing campaigns and how much you spend on them. It is very important to keep points given above in mind when you are marketing your brand. When you ace that, you can make strategies which have a naturally higher ROI than others. Don’t make the same mistakes other brands make. Don’t let low ROI stand in between you and success. Contact socialee.in for customized marketing plans with high ROI now.