Return on Investment aka ROI is one of the essential elements of a business. It will help you define your short-term and long-term goals, as well as help you to aim for success from the start. ROI is an important tool for resource allocation and boosting profits which is a good starting point for a company.
The best way to do so is to measure the marketing campaign and concentrate on its successful effect on your potential clients and customers. If they are satisfied with your service or unhappy with something, you should know and use it to improve your efforts. Simply put, it’s all about creating a loyal fan base which will help you to spread the word about your products and grow.
ROI studies are one way to get to the bottom of things and calculate the value their business created. These studies work on comparing the benefits of strategies on economic and social values to the costs needed for their implementation. That is why they are commonly called the cost-benefit studies.
To present this in a nutshell here is a short summary of a study on how wellness programs for employees can help ROI. Basically, since 1995, Johnson & Johnson invested in their employees’ wellness programs which are even today considered a nice working benefit in any company. They were able to lower the percentages of people who were in the high-risk group by investing in their overall health.
This strategy saved the company $250 million in health care costs and created quite ROI, namely $2.71 for every invested US dollar. Similar programs in other organizations and companies gave the same results, based on the study. Based on 10 businesses and interviews with 300 employees, CEOs and CFOs, the study authors were able to identify and prove the benefits of the wellness programs to maximize ROIs.
Of course, every strategy to maximize ROI has to be carefully planned and designed in order to preserve the resources and bring the best results. The wellness program is only one of many ways to maximize ROI with less effort. There are many ways to reach your goal, and here are some of them that might give you an idea or few.
Calculate your ROI
Planning is the foundation of any campaign, strategy, and program, and it will help you measure your ROI. This means that you will have to observe a large amount of data over time in order to see what the best course of action for you is. Start with an outline, and move for a more detailed plan based on the data you collected.
As you see, you may have to play Sherlock Holmes a bit but it will help you reach the predicted ROI. Measuring effectiveness is an important part of any company. It is carried out through predictive modeling, analyzing marketing data and aligning it with financial goals, as well as paying attention to customer behavior.
You will have to calculate ROI for the plan to work since everything will revolve around reaching that anticipated number. Moreover, without it, all efforts are useless and at the end detrimental to the business. The basic formula for calculating ROI is: (Return/Initial Investment) x 100 = ROI.
For example, let’s say that you obtained a business for $200,000. After some time and investment, the business grew and you sold it for $300,000. The return value in the formula you will get by subtracting $200.000 from $300.000, which equals $100.000.
Divide $100.000 with an investment of $200.000 (Return/Initial Investment) and multiply by 100%, and you will get your ROI of 50%. However, things will hardly be that simple in practice and you will probably have to account for profits you reinvested in the business and so on.
Of course, these are the calculations that your accountant will do or any third party you hire to implement the marketing strategy. However, knowing the basic principles on which your marketing strategy will be based is not only important for profits but also to know if you should change the image and rebrand your company.
Reduce your expenses
As mentioned in the example of a study before, investing in certain aspects of your business can actually reduce your costs in order to improve ROI. Just like the wellness programs, there are also other ways to lower your expenses. Of course, you don’t have to make new investments every time like in the study, but rather cut the ones that are running you dry.
For example, reexamine your overhead costs like rent, bills, and insurances. These are usually the expenses you can easily downsize considerably if you put your mind to it. Try to renegotiate a new lease agreement the moment the old one is over and see how much does this property already costs you.
If your employees have to commute longer or pay parking spots, then those are all expenses you will have to cover as a company whether financially or by dealing with unsatisfied workers. On the other hand, work on the better deals with the cell phone provider and think about going green. Installing solar panels will lower your electricity bill and gain you positive reputation in the business world.
Employ content marketing
Content marketing ROI is significantly high because all the images, articles and videos are made for the target audience. This will help you build your reputation and, of course, attract more traffic to your website. With conversion focused web design, and subsequently successful SEO, you can increase the chances to achieve ROI.
Namely, you will have minimal costs to create content for your website, than by working on a billboard ad, for example. More importantly, it will last longer since you are the one defining the time certain content will spend on your website. As long as it’s there, it can create traffic and conversion.
If you want to reach higher results, you will have to think about bigger and more complex content marketing strategies. One of those is to create content for several goals, namely improve your relationship with existing customers and earn more conversions at the same time. Don’t use one but a little bit of all the strategies as one marketing campaign, to say it more precisely.
Instead of creating as much as possible, create the highest quality content as you can. This way you will provide valuable content to your visitors and focus on important topics for your business and target audience. Additionally, try to mainly publish content that won’t lose its relevance over time, like the news would.
What customers want
Well, knowing what the customers want is a little bit tricky, but not unattainable. You will have to monitor the trends, customer tastes and be in the loop of things in order to find what to base your marketing campaign on and improve your ROI. Bear in mind that satisfying your customers is a challenge and one that can turn on you if you rush it.
For example, communication with customers has become very important part of the business process today. Even though the feedback you receive will not be positive or pleasant every time, you have to keep your composure and try to resolve the issues gallantly. Good and bad reviews will give you an important insight in what to eliminate, introduce or improve in your business.
One of the ways to build good communication with your customers is through social media. The best way to do this is to employ one or more persons who will only be responsible for your social media accounts. Depending on the demographics of your target audience, you will have to build more or less presence on certain platforms. In some cases, you will have to neglect certain ones altogether since that would be waste of resources.
You may see all this as one complex issue – and you are right. A basic understanding of ROI is all you need to start focusing your resources in the right direction and building quality strategies. Less effort doesn’t mean easy, just like aiming for high success never is.
If anything, it means that you will have to really tackle this thing. Therefore, don’t be afraid to ask questions or consult experts if that will maximize your ROI. In case of company improvements, curiosity only gave the cat nicer fur and a warm place to sprawl in.