Today’s Marketing leadership is expected to be data-driven and measurement savvy. Your Marketing plan should immediately demonstrate both capabilities. In fact, calculating your Marketing plan ROI should be an integral part of your business processes.
Determine your Marketing plan’s ROI by arming your team with data related to finding, keeping and growing the value of customers.
Start with these five easy steps:
- Identify the cost of everything in your marketing plan. Don’t forget to factor in labor costs associated with each vehicle and program. If you don’t know the labor costs, ask your finance team for an average hourly rate. Itemize each vehicle and program’s cost and sum the total. This should add up to your total marketing budget.
- Determine the number of expected qualified engagement opportunities for each vehicle and program. For example, how many existing or prospective qualified attendees are expected to come to the trade show and/or webinar? How many qualified existing subscribers are reading the newsletter and/or email? If you can’t quantify the expected engagement for a vehicle (some vehicles are in support of the overall program, but can’t be easily quantified), use “0” and include its cost in the Marketing Plan ROI equation.
- Indicate the expected number of qualified new opportunities from existing AND prospective customers generated for each vehicle, program and the overall plan by using historical data, benchmark data or your best estimate,
- Gather the following information to do the calculation:
- Qualified Opportunity-to-Proposal %
- Proposal to Closed Deal %
- Average Order Value
- Apply the following formula:
- Total Number of Qualified Engagement Opportunities for all programs X Expected Response
- Rate for all programs = Opportunities Generated Per Year
- Opportunities Generated/Year X Lead to Proposal %
- Number of Proposals X Average Close Rate
- Number of Closed Opportunities X Average Order Value = Expected Revenue
- Expected Revenue – Total Marketing Plan Cost = Marketing Plan ROI
You can use this same formula as a quick way to determine whether it makes sense to implement a program. This approach requires that you have an opportunity performance target in mind before you initiate any program.