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Maximizing your return on investment (ROI), means carefully spending your budget where you will receive the maximum results. ROI is calculated as the amount in profit you make from any specific marketing program divided by what you pay for it ($profit/$marketing cost). In most cases you should expect to earn 5-10X more in profit than you pay for marketing.
Referrals - You just can’t beat referrals. According to a MIT study you are 15X more likely to close a referral than other leads and they are basically free!
Email Marketing - Staying in touch with past customers keeps your business on their minds and often generates referrals. Email marketing is extremely cost effective, but it’s a long-term process and can only bring a moderate amount of business, usually repeat customers.
Search marketing - Search Marketing is not free, but can be extremely effective. It provides instant results, has a very high ROI and may cover as much as 75% of your online marketing program.
SEO – This is a critical element of your online marketing strategy, but with competition from local directory services, you’ll receive a modest number of leads.
Local directories – A word of caution – you may get referrals, but these are also a place for unhappy customers and competitors to post negative comments.
Social Media - This is useful in maintaining customer loyalty and growing new customers, shares and likes from facebook and twitter re-tweets can rapidly expand your exposure.
Website - Your website is your business card, but it doesn’t sell itself. Without the marketing programs above, it will be ineffective. Your potential new customers visit your site and often determine if they want to do business with you.
If they find the information that they are looking for and if they like the look of the your site.
The pyramid above shows the return on investment from highest to lowest, and the relative amount of revenue that can be achieved.
All of your marketing programs MUST provide a positive Return on Investment (ROI). Look at the cost for each program independently and determine its return. The graph above shows relative numbers of return and revenue. Keep in mind that sometimes it’s important to take lower paying jobs or higher cost marketing programs just to cover more costs.
In the example below is a hypothetical example of a marketing program consisting of a search marketing campaign, social media marketing campaign and website.
As we stated above, search marketing can be the most robust online campaign for its effectiveness of pulling in the most customers and a very effective cost per customer. Today over 94% of potential new customers begin their search with a search engine and these customers are seeking to learn about and purchase your products or services – NOW! Research shows the search marketing often pulls in the bulk of the business and achieves a return on investment of 5-10X.
Social media marketing, on the other hand, can produce a highly variable ROI, based on the dynamics of the product interest, activity of the social group interested in your products or services, but the example below illustrates how this can be calculated.
Our dynamic posting of coupons and specials can allow search engines and specials and coupons search engines to find your deals. You should expect less overall business directly to your website.
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LOCAL BUSINESS SALES
