Marketing and Generating The Best Return on Investment

This newsletter, is an introduction to marketing. Some marketers define marketing even though that's what you do every day. The truth is that marketing is a pretty broad and complex term to have a simple definition.?

According to Dictionary.com, marketing is "the action or business of promoting and selling products or services, including market research and advertising." However, this definition doesn't feel too helpful. For instance, the selling bit overlaps with the purpose of sales. Nevertheless, marketing heavily coincides with sales and advertising. As a result, marketing is there in every stage of the business, from start to finish.?Marketing:?Why Is It Important and How to Get a High ROI? Today, we will look at marketing, why it's important, the different types of marketing, and much more.

What Is Marketing?

Marketing is any action a business takes to attract people to the business's services or products using high-quality messaging. The goal of marketing is to provide standalone value for consumers and prospects through content, with the long-term objective of showcasing product value, increasing brand loyalty, and ultimately growing sales.?

Purpose of Marketing?

Marketing is the process of arousing interest in your business's products or services. Moreover, this occurs through market research, analysis, and learning the interests of your ideal customer. In addition, it is essential to differentiate yourself from the competition and define your?unique selling proposition. Marketing pertains to every aspect of a business, including new product development, advertising, distribution methods, and sales.?

Modern marketing started in the 1950s when people began using print media to endorse a product. Then, with households getting access to TV and the internet, marketers could execute entire campaigns across numerous platforms. Over the past seven decades, marketers have become incredibly vital to fine-tuning how a company sells a product to customers to improve success.?

The primary goal of marketing is to attract people to your business through messaging. This messaging should be educational and helpful to your target market to convert audiences into leads.?

Different Types?

Where your marketing campaigns live depends entirely on where your customers are spending their time. You can perform market research to determine which type of marketing – and what combination of tools to every kind – is most suitable for building your brand. Here is a list of the most common types of marketing used today.?

1. Print Marketing?

As magazines and newspapers get better at learning who subscribes to their publication, companies continue to sponsor photography, articles, and related content in the print material their target audience is reading.??

2. Social Media Marketing?

Companies can use Instagram, Facebook, LinkedIn, Twitter, Tiktok and similar?social media platforms?to create impressions on their customers over time.?

3. Blog Marketing?

Initially, individual writers used blogs. Today, brands publish blogs to talk about their industry and foster potential customers who use the internet to seek information.?

4. Internet Marketing?

The sole idea of being present online for business purposes is a form of marketing in and of itself.?

5. Video Marketing?

Even though there were once only TV commercials, marketers now invest money in developing and publishing videos that educate and entertain their core customers.?

6. Search Engine Optimization?

It is optimizing the content on a website to come up in the search engine results. Marketers use this to attract customers who conduct searches that indicate they want to learn more about a specific industry.?

7. Search Engine Marketing

Companies can now pay search engines, such as Google or Bing, to place links on their index pages that get high exposure to their audience. Usually, this is known as pay-per-click.?

8. Content Marketing?

Content marketing is the process of planning, creating, publishing, distributing, and sharing content via channels such as blogs, social media, podcasts, websites, apps, print publications, press releases, and more. The objective is to reach your target market and boost brand awareness, engagement, sales, and loyalty.?

Importance of Marketing?

Are you well-versed in your customer's needs? Do you feel your customers trust your brand? When was the last time a customer spoke about your product or service? Did they have positive or negative things to say??

The way you market your brand vigorously impacts the success of your business. Marketing is a tool used to generate and maintain demand, reputation, competition, relevance, etc. Conversely, your brand will likely close down without marketing due to low sales. Here are some reasons highlighting its importance:?

1. Effective Tool to Engage Customers

Its imperative for your business to engage its target audience. Marketing is a tool that helps keep the conversation flowing.?

Engaging an audience is not the same as pushing your product. It involves giving your customers sufficient information about both your business and products. It's all about creating creative content and telling your audience what they don't know.?

Social media is one of the best channels to engage your customers. For example, some businesses use clever tricks and other short video clips to engage their target audience.?

Marketing helps engage your customers, which gives them a feeling of belonging.?

2. Helps Establish a Company's Reputation?

Business reputation affects its growth and lifespan, and brand equity. Hence reputation management is critical to ensure the longevity of the business.?

Customer feedback is vital to a company's progress to exceed its client's expectations. Moreover, this positions the company as a responsible community member and makes customers feel proud when associated with your products.?

Marketers can use effective branding, communication, CSR, and PR strategies to ensure that a business has a well-maintained reputation.?

3. Connects Businesses with Its Customers

Businesses have to build a relationship of understanding and trust with their target audiences through the different stages of the brand lifecycle. Customers This leads to brand adoption and loyalty. In addition,?loyal customers?are more likely to purchase from you again. In addition, the understanding and trust between the business and its customers make your commercial activities more productive.?

4. Informs Customers?

Marketing is a communication channel that informs your customers about the services or products you are offering them. Marketing will enable customers to learn about the value of your products, how to use them, and additional helpful details. It results in brand awareness and allows the brand to stand out.?

The market is quite competitive, and you need to remind your customers about your product or services consistently. Inform them about discounts and unique features of your offer. You will become a market leader in your business by using proper communication.

5. Increases Sales

Marketing uses numerous ways to promote your services or products. Advertising your product gets the word out and increases the probability of selling it.?

Customers might wish to try out your product, resulting in a buying decision. When customers are satisfied with your offering, they become your brand ambassadors. They spread the word, and consequently, your sales will start increasing.?

Make sure your products and services are of high quality to supplement your efforts.?

Marketing Return on Investment

One of the essential elements of a marketing campaign is to assess its impact and performance, and profit. This way, you can determine if your marketing campaigns improve your company's bottom line. In addition, we can use the insights from the process to make future, data-driven strategies for better decision-making. But, first, let's look at the return on investment in marketing.?

What Is Marketing ROI?

Marketing return on investment is the practice of ascribing revenue and profit growth to the impact of marketing efforts. Calculating marketing ROI allows firms to determine how a campaign or holistically marketing initiatives lead to revenue and profit growth. Generally, marketing return on investment justifies budget allocation and spending on current and future initiatives and campaigns.?

How Do Companies Use Marketing ROI?

Determining marketing ROI can enhance marketing efforts and drive business decisions at a company level. Understanding a marketing campaign's ROI helps marketers:

1. Justify Spend on Marketing Efforts

Allocating budget and resources for marketing initiatives is one of the marketers' top priorities. Nevertheless, to secure resources and funding for future endeavours, it's imperative to justify the existing marketing budget and spend at the executive level.?

Thus, marketers must calculate the ROI their marketing initiatives are generating precisely. For instance, they should know if display ads increase ROI and conversions, hence assigning budgets accordingly.?

2. Allocate Marketing Budgets

Throughout offline and online channels, there are several potential marketing mix blends. Nevertheless, any combination of marketing initiatives needs funding. Hence, understanding which offline and online initiatives drive the highest revenue is crucial for allocating the marketing budget adequately.?

3. Determine the Success of a Campaign and Set Benchmarks

A successful marketer can effectively measure the success of a campaign and set benchmarks.?

By determining the effect of individual campaigns on overall profit and revenue growth, the marketing team can better identify the most suitable combination of online and offline campaign initiatives. Besides, they can measure the campaign performance across different KPIs and adjust accordingly to attain the highest possible results.?

4. Competitor Analysis

Monitoring the competitors' marketing efforts on specific KPIs helps us understand their marketing strategies and their performance in the market. Moreover, it helps us adjust our efforts accordingly and improve our positioning with the targeted segment. Conducting such analysis is done through industry data or privately commissioned research to monitor brand performance continuously.?

Calculating Marketing Return on Investment?

There are several methods to calculate return on investment. However, the core formula used to assess marketing impact is pretty simple:

{((number of leads x lead-to-customer rate x average sales price) - cost or ad spend) ÷ cost or ad spend} x 100.

Moreover, to calculate return on investment using the formula mentioned above, you need to identify the following elements:

• The number of prospects:?The number of people who converted to a qualified lead.?
• Lead-to-customer Rate:?The percentage of leads converted into a customer. If 200 out of 500 prospects became customers, your conversion rate is 0.4 or 40%.
• Average Sales Price:?The average price of your product or service. Averages are helpful if you often use discounts or change pricing in other ways.?
• Ad Spend or Cost:?The amount of money you spent developing and promoting the campaign. Here, you can include costs such as wages of the people involved in the project, costs associated with creating content,?ad spending, etc.?

In addition, Apart from looking at hard revenue, you should also consider other non-financial components when assessing the success of a marketing campaign. Besides, these might be likes or followers on social media, unexpected web traffic, or even a feeling of increased trust from your customers.?

Even though these elements don't provide an instant financial return, they can indirectly enhance customer relationships and purchases later.?

What's A Good ROI?

The objective of ROI is to earn more than a dollar for every dollar spent on a campaign. "Good ROI" can vary from one industry to another, distribution channels, and marketing strategy you use.?

Determining a single marketing ROI baseline is tricky because every marketing strategy is different.?

When using an online ad strategy such as PPC, you might quickly see how your ad's ROI compares to other similar ones. Platforms such as Google Ads have years of rich data to support their reported?800% return?on investment benchmark.?

Placing tags on specific pages within the client's website or creating a separate landing page to drive traffic from various digital channels will allow us to understand the channel performance.?

Improving Return on Investment?

The formula used to calculate return on investment might seem straightforward. Yet sometimes, we need to consider several elements to improve the ROI.?

1. Setting Multiple Measurements??

Having a single benchmark for ROI measurement might be misleading. Instead, marketing teams should apply detailed criteria to ensure proper measurability. Moreover, this should include competitive activities, seasonality, events, holidays, school days, weather conditions, and political and economic trends.?

2. Consider Long-Term as much as Short-Term Goals

Several marketers focus on particular, instant metrics to determine the success of their initiatives. For example, we generally look at social shares, impressions, click-through rates, etc. Nevertheless, campaigns that focus on attaining long-term goals such as customer relationships,?brand awareness, and customer retention usually take months or years before marketers can see the full impact. Therefore, it is essential to align success metrics with a particular campaign's duration and overarching goal.??

3. Contemporary Attribution Models

Using obsolete attribution models to measure and attribute the impact of channels and touchpoints can result in misattribution. Besides, this can distort the accuracy of return-on-investment measurements. For example, using aggregate measurements such as media mix models won't offer the granular insights marketers require. On the other hand, fine measurements such as multi-touch attribution models don't indicate the impact of external factors and offline channels on return on investment.?

Higher Marketing Return on Investment?

To boost return on investment, you need to either lower your costs or increase your sales. If your marketing efforts are inefficient, you should try to reduce your costs. Otherwise, your goal should be to increase your sales.?

Below there are some helpful tips on how to maximize marketing ROI.?

1. Set Clear and Well-Defined Goals

If you wish to increase marketing return on investment, you should start by setting an ROI goal. Having clear and well-defined goals can help you create a plan for attaining and tracking your performance.?

Ideally, you should set?SMART goals?– specific, measurable, attainable, relevant, and time-specific.?

Specific.?Rather than having something vague like 'increase ROI,' your goal should be more precise, such as 'grow ROI by 15%.'

Measurable.?Ensure you have the correct data collection and reporting tools to measure your progress.?

Attainable.?Make sure your goals are realistic.?

Relevant.?Your marketing return on investment goals should be relevant to your broader business objective. For instance, if your primary purpose is to grow sales, getting more followers on Instagram isn't a pertinent goal unless it's contributing to sales.?

Time-Specific.?Set a timeframe with which you aim to accomplish your goal. For instance, you might want to increase ROI by 15% within three months.?

2. Focus on the Relevant Metrics

It would be best if we were careful when deciding?which metrics to track?to increase your marketing ROI. Make sure these metrics accurately reflect progress towards your goals. Avoid vanity metrics that distract you from the business objective. Typical marketing metrics such as Facebook likes might be impressive but don't add much to revenue.?

It is crucial to determine your campaign goals and set the right metrics. For example, if your objective is to increase sales or revenues, you might want to track conversion rate, cost per acquisition, customer lifetime value, etc.?

Alternatively, you should track direct traffic, referral traffic, social media mentions, etc.?

The marketing return on investment metrics you track impact your goals progress. Thus, measuring the appropriate metrics ensures you know how to enhance ROI.?

3. Leverage Market Automation Technology?

Marketing automation tools allow you to maximize ROI by making marketing processes more precise and efficient. These tools can take care of repetitive or recurring tasks and analyze information to help you optimize your campaigns.?

For instance,?email automation tools?can send emails to prospective customers at specific time intervals or when they complete particular actions on your website. As a result, you won't have to send emails manually and save much time investing in other value-added tasks.?

Marketing automation can also aid in several other aspects. Moreover, this includes lead tracking, audience segmentation, and content personalization.?

4. Experiment Frequently

A great way to increase marketing ROI is to experiment frequently and utilize your findings to enhance your campaigns. For example, try out different channels and adjust your campaigns to see what works best for your goals and audience.?

A/B testing is a great way to test and polish campaigns. It entails developing two or more versions of specific content, such as an email, web page, or ad, and showing each version to a different random group of prospects.?

You can track sales, clicks, or metrics important to your campaign throughout the test. Once the experiment ends, you can check the results to see which version led to better results. Then, you can make the top-performing version the permanent one and move on to test another aspect of your campaign or content.?

In Summary

I have tried to write a comprehensive guide on the importance of marketing, various communication channels, and getting the best return on investment.?

Nevertheless, success's secret lies in proper and granular targeting. Moreover, it uses live data to target different audiences with relevant messages beyond the usual demographics. Technology currently allows us to understand online and offline behaviours leading to a better return on investment.?

I would like to thank you for reading my newsletter. Would it be OK to provide your feedback please, and how can I make it relevant to you. Moreover, I appreciate your comments. I am available for a quick discussion on how we can help you achieve your marketing and advertising goals.

Let's Talk, please reach out, message me or send an email to [email protected]

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