Return on Investment, or ROI, is used to measure the profitability of your marketing efforts. But for small businesses it can sometimes feel like calculating marketing ROI is too hard, or they do not know how to process what the number means.
A common question about marketing ROI: What is considered a good marketing ROI number?
The truth? It depends.
At the end of the day, a good ROI percentage is up to you, the small business owner. However, there are certain things you should consider when deciding whether your marketing ROI is good.
The Age of Your Business
Where your small business is in the life cycle can impact what you consider a reasonable ROI. If your business is just starting out then you are likely going to see a lower ROI, which is absolutely understandable. Your business is starting from scratch, which means your marketing initiatives are going to be costlier. However, if you are an established brand then a lower ROI might mean your marketing initiative needs to be tweaked.
Your Industry
Finding the average marketing ROI in your industry is a great way to give yourself a baseline or range for what you consider a good percentage. Just keep in mind that you are your own business – do not compare your business to others. You are on YOUR journey.
Your End Goal
Some marketing initiatives are not about making money or sales. If you are trying to build brand awareness or establish yourself in the community, then you are unlikely to see a high ROI.
Pro tip: You can still track ROI in these scenarios. Asking customers how they found you can help you pinpoint an initiative that brought them in. You can also create landing pages, QR codes, etc. as ways of tracking the amount of visibility an initiative is getting.
If you are looking for a deeper dive into marketing ROI and how you should handle it as a small business owner then check out the video below! We talk about how to calculate ROI, what a reasonable number is, and how to track it.
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Feel free to share your thoughts with me, I can be reached at vivian@theseasonedmarketer.com!
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