Do you have team members with the responsibility to buy and maintain services from agencies, freelancers, and SaaS /MarTech tools and solutions – have you learned them how to figure out the ROI? You probably have someone expecting a return on the investments right – keep reading and I will do the complex simple for us, or you´ll tell me?
Who needs to anticipate ROI?
This is a really good example for companies who want more website traffic, exposure, and consumer/market insights and that knows their financial (digital) goals but maybe don´t really know how much traffic or marketing they need to reach their goals.
Extracting the value
I think both you and I are curious about how people buy and maintain these types of services as the complexity of the tool based landscape and services is growing.
When I meet founders, investors, CEO´s, CMO´s and marketing specialist in all different areas as e-commerce, B2C, B2B and SaaS I see common emotions.
Why is the value so hard to see? It´s not that I want to discuss the difference between employees and consultants with your Opex, this is different.
I felt the need for a simple equation as a reminder.
A reminder that anyone can use when facing questions about the value of tools and marketing services – or what do you think?
Once people figure out a smaller tool-tech-stack and marketing services then they must have the ability to navigate the data it aggregates, segment and translate it to create and extract value from it.
If not, then it will become difficult to hack the sales funnels and customer journeys to improve on the negative customer, user or prospects touchpoints/footprint.
Do this before you start calculating the anticipated ROI
You need three things:
1. What is your average # of monthly website visits
2. What is your conversion rate on the website (leads, sales or subscribers)
3. What is your average order value (or commission value)
Without these, you cannot calculate the anticipated ROI but when you have these in place you can easily see if you reach your weekly, monthly, yearly revenue goal or not, right?
It´s the same equation, but a different marketing service to anticipate ROI with
Here goes, as you can see, I´m only changing the marketing services:
• Anticipated ROI = (Anticipated Revenue from “SEO” efforts – Proposed Cost of “SEO” Project)/Proposed cost of the “SEO” project
• Anticipated ROI = (Anticipated Revenue from “Facebook” efforts – Proposed Cost of “Facebook” Project)/Proposed cost of the “Facebook” project
• Anticipated ROI = (Anticipated Revenue from “Marketing Automation” efforts – Proposed Cost of “Marketing Automation” Project)/Proposed cost of the “Marketing Automation” project
• Anticipated ROI = (Anticipated Revenue from “Content Marketing” efforts – Proposed Cost of “Content Marketing” Project)/Proposed cost of the “Content Marketing” project
• Anticipated ROI = (Anticipated Revenue from “Google Ads” efforts – Proposed Cost of “Google Ads” Project)/Proposed cost of the “Google Ads” project
I hope you found this valuable, easy and resourceful. Don´t let your competitors be faster, don´t guess, use data-driven proof for your ideas and connect below to let me know how you felt about this article or at Linkedin or DM me at Instagram or Messenger.