When you are building your ecommerce website, there are a lot of different components to focus on. But when it comes to creating a successful ecommerce website, there is one thing you cannot forget: profit. One of the best ways to help measure your profit is through your marketing ROI and other forms of ROI.
This article will discuss the definition of ROI, as well as how you can measure your success in Return on Investment work, and your campaign ROI benchmarks. We will also cover ROI in SEO, which is also an important calculation for any ecommerce platform or other website.
Defining ROI In Marketing
Before we can dissect the different ways that ROI can be used in your advertising and campaigning, the first question we have to answer is, “What is marketing ROI?”
ROI stands for Return On Investment. This is a measure of performance that is used to determine how profitable or efficient your investment is so far. ROI is able to offer you a detailed look at the entire promotional campaign so far, instead of just the beginning or end of it. This way, you can gain a complete understanding of your investment journey.
Typically, ROI is used in two different ways: for stocks in holding or stakes in a company. Either way it is used, ROI formulas offer a comparison of different investments to see which are most successful or profitable. Profit, being one of the most essential elements to a company’s success, is important to keep a close eye on.
By Measuring marketing ROI, you are able to learn where your budget can be best distributed. If one of your investment projects is going much better than another, you can rearrange your funds to better support what is already working. If your ROI is a net positive, that means everything is going smoothly. The higher your ROI, the higher your profits. Every company’s ROI is treated differently based on the finances of the company as a whole. Remember that there might be other expenses to pay.
Measuring Marketing ROI
Measuring your ROI for promotion is the most important part of the ROI process. From this measurement, you will be able to justify your market spending, distribute market budgets, perform legitimate competitive analyses, and even measure your campaign success.
How to Measure ROI:
Here are the necessary steps to measure your company’s ROI:
- Learn how much it costs to produce content. Compile all of your potential expenses, including the outsourced work that you are paying advertising experts, your own employees, and more.
- Learn how much it costs to release content. This includes any advertising and promotional material.
- Calculate the direct sales from your content. The total number of sales you make from your content, including any marketing leads, will be your Return Value.
- Use the ROI Equation.
The Content Marketing ROI equation is as follows:
((return – investment)/ investment) x 100 = ROI
Multiplying by 100 is what gets you a percentage of your ROI. If your total comes out to 400%, for example, you have generated four times as much revenue as the campaign cost.
A good ROI is typically a 5-to-1 ratio, but the absolute best ROI can reach a ratio as high as 10-to-1. But, as previously stated, every company is going to be slightly different. You might find success at a slightly lower ratio if your costs and overhead are lower than 50% of the sales price.
This is a very simple formula, and there are some more nuances and details that can be added if you so wish. Sometimes, there are additional factors that can come into play around ROI (like SEO, for example). But, this equation is a great way to understand how successful your campaign has been so far.
Content Marketing, SEO, and ROI
Another element of marketing ROI that you may not consider right away is SEO. SEO stands for Search Engine Optimization. It comprises of the efforts you take to push your website to the top of the search engine results page (SERP). This can include optimizing your website’s loading speeds and design, as well as the strategy behind all of the content you write or the use of targeted advertisements. SEO is an important part of successfully selling your website and gaining traffic from web users. You will likely want to find the ROI for SEO as well as just your ROI in marketing.
Measuring SEO ROI
Here are the steps you can take to measure your ROI for SEO:
- Find your SERP Position. In an ideal world, you would be at the very top of the search engine results page. However, this can take a long time and actually tends to fluctuate. Get an average every four to six months, and find how many people click on your website.
- Pull Your Conversion Rates. Set up Google Analytics and set goals for yourself. Increase sales, duration of time on site, and more. These goals are measurable, and you can pull your data from them after a few months.
- Identify the Monetary Value of Each Conversion Goal. Give this a lot of thought, and try to properly estimate the value. This is what will help you measure an accurate ROI.
- Estimate Traffic and Revenue based on Search Value. Calculate your click-through rate, conversion rate, and your keyword search volume. Calculating these numbers will give you estimated revenue for a month or year.
The SEO ROI Equation is as follows:
(Estimated SEO Revenue per Month – Cost to Implement Strategy) / Cost to Implement Strategy x 100 = SEO ROI
ROI Benchmarks
Another helpful part of measuring marketing ROI is through the help of benchmarks. Benchmarks are like guideposts that can help you determine the right standard of what makes a good marketing ROI campaign. The primary way to do this is actually by looking to the past.
You can pay attention to the previous successes within your own company, but also be sure to open your gaze to the rest of your industry. Comparing these things will give you a good competitive benchmarking program. This is a great way to understand how and when your competitors are doing better or worse than you. You can turn this understanding into constructive adjustments, and learn how to improve your own campaign.
Your benchmarks can also be entirely individual. Perhaps your company does not quite fit the mold when it comes to typical businesses in your field. Or maybe you are just looking for a way to measure your success that is not exclusively competitive in nature. Try looking at the ROI of similar promotional tactics that you have used in the past. You can measure your current success against your past self, instead of competing with other businesses.
Remember that benchmarks can also be impacted by different campaign channels. If you are trying to measure your Pay-Per-Click advertising, you have a very easy way to acquire data. Advertising through content like videos or podcasts, however, can sometimes be more difficult to get the right numbers for.
Boosting Your Return on Investment
So, after you have done all of this work calculating your Return on Investment, how do you boost your marketing ROI? Here are a few suggestions on how to take your ROI to the next level:
- Develop a Strong Call-To-Action. A good Call to Action (CTA) is how you can prompt your potential customers to take the next step. Maybe that next step is making a purchase, signing up for an email list, or make a download. No matter what, a quality CTA can boost your conversion rates.
- Explore Pay-Per-Lead Marketing. Pay-Per-Lead might be a good investment for your company. This campaign technique means that you will only pay for the leads generated through the campaign, and not for anything else. This can save you money and help you strategically place your advertisements.
- Refine your Email Strategy. Email campaigning is one of the best ways to push your ROI forward. Create personalized content for your audience, maybe even adapting the content for different demographics.
- Invest in Long-Term Relationships. Don’t just focus on gaining new customers. Make sure your current loyal customers are well taken care of, too. Think about creating a loyalty program or increasing your social media usage.
- Identify Your Highest Performing Channels. Know which of your campaign channels are giving you the most success. These are the channels that you definitely don’t want to pull any budget from; in fact, maybe you learn that you want to increase their performance so you can gain more ROI.
- Work with the Right Team. Perhaps most importantly, remember that you don’t have to increase your ROI in marketing all by yourself. Remember to get the right team on your side, and make everything else easier.
How SEO Design Can Help
At SEO Design Chicago, we are built to specialize in ecommerce marketing, SEO, and more. Our goal is to get you the best Return on Investment possible. Our team of expert analysts can help calculate your marketing goals, find your ROI benchmarks, and more. The best way to boost your marketing ROI is to work with the best team.
Join us at SEO Design Chicago today for a new way to profit.
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