Calculate RoI For Your Electrical Business' Digital Marketing
Digital marketing, if not approached logically and with a solid strategy, can prove to be a black hole that sucks your bank accounts dry without any returns. So, before you go ahead and spend thousands on a digital marketing campaign, be sure to calculate the return on investment on that campaign.
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Every time you spend on a digital marketing campaign, you should aim for at least 5-7 times back your time, in most cases, the brands and companies aim for more than that. So, for every $ you put in you need to get $2 back. When calculating your expenses, you also have to consider your running costs, operational wages, and the hidden margins. Suppose, if you were to put in 2K and get 4K back, and still have 2K running costs to pay then your net gain/loss comes to ZERO. So, at the end of it all, you have got to look at what your profits are because there is no point making a 3K margin if your profits are just 10K/year.
However, in a Marketo blog post, the author has a slightly different view. Sometimes, the returns of digital marketing campaigns are not imminent, rather they are accrued over time. You can calculate the returns in terms of brand awareness, brand impression, downloads, and website footfalls/visitors. It will help you to tell you a complete story.
The Digital Doughnut website suggests these following Key Performance Indicators (KPIs) to measure the success of your Digital Marketing campaign:
- Measure the general performance of your campaign via the stats like traffic generated, leads collected, and the reach of the campaign at large.
- Divide it into channel-based traffic such as from website, blog, social networks, and the search engines.
- For further clarity, you can see where the traffic came from, so opt for a source-based performance and measure it. Did you generate a lot of direct traffic? Or was it all organic search? Or maybe it was because of referrals, emails, or even your pay-per-click campaigns.
- Your digital marketing campaign should also be evaluated for its performance in terms of lead generation, click-throughs, conversions, and the rate of final conversions.
- Lastly, when you set out to implement Digital Marketing you should set realistic, achievable, and measurable goals.
Depending on what is the end-goal for your Digital Marketing campaign, Augurian suggests these 10 metrics to calculate your ROI:
Unique monthly visitors -- Calculate how many people visited your electrical business website as a result of the campaign that you ran.
Cost Per Lead -- What was the cost of acquiring a lead? You can calculate it to get a more realistic idea about the cost-to-conversion ratio.
Cost Per Acquisition -- Divide the total spent by the number of paying customers you acquired via this ad.
Return on Ad Spend -- You can calculate the amount you used to fund an ad and the amount you made back on it.
Average Order Value -- Might not be applicable to the electrical industry as we often get repeat customers and orders.
Customer Lifetime Value -- What sort of value is the customer bringing to your electrical business? Are they becoming repeated, loyal, lifetime customers?
Lead to Close Ratio -- How many leads did you generate? And how many of them were you able to close?
Branded Search Lift -- Have people started associating your brand name with the result? Are they directly googling for “XYZ Electricals”? That’s a big win!
Average Position -- Has your average positioning improved in the market and in the electrical industry?
Non-Brand CTR -- Has the campaign positively affected your non-brand click-through-ratio such as Google ads and its placement?
I hope that the above metrics and methods will help you to get a more realistic idea of what to expect from your electrical business’ digital marketing campaigns. Let us know how do you plan to calculate your RoI!
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