“Did this program - expo/ promotion/ email campaign/ print ad/ radio ad/ insert your latest  deliver a return on our marketing investment?”

A simple enough question, right?  Except that if you have asked it yourself, you will know that finding the answer is challenge.  Measuring the success of a marketing program can be considered the holy grail of marketing measurement.  

Why so?

  • Last month’s expo may deliver results next month or perhaps not for two years.
  • As marketers, we know that it takes multiple touches to create a customer, which makes it difficult to allocate revenue to any specific touch.
  • When dealing with big companies, we often need to influence a whole committee of decision-makers – each with individual being influenced differently.
  • Answers change as customers evolve, the economy fluctuates, how your sales reps perform – or not.  Can those external factors (positive and negative) be incorporated into our ROI calculation?

We can’t dodge it though

Despite the variables which makes calculating your ROMI (Return on Marketing) complex, it is by no means impossible.  To optimise the results of your marketing investments look at the revenue to cost ratio: incremental revenue driven by a marketing campaign divided by the cost. 

Return on Marketing Investment (ROMI) =

[Incremental Revenue Attributable to Marketing (ZAR) * Contribution Margin (%) - Marketing Spending (ZAR)] ¸ Marketing Spending (ZAR)



Incremental Revenue Attributable to Marketing

refers to

Total revenues after introducing the new marketing campaign (using a comparable time period) - base figure from total revenues for a period

Contribution Margin

refers to

The amount by which sales revenue exceeds variable costs ie R amount per unit

Marketing Spending

refers to

Total expenditure on marketing activities. This typically includes advertising and non-price promotion. It sometimes includes sales force spending and may also include price promotions


The rewards 

Marketing campaigns are investments: And like any smart investment, they need to be measured, monitored and compared to other investments to ensure you’re spending your money wisely.  With solid ROI calculations, you can focus on campaigns that deliver the greatest return to your company regardless of which product or service you’re selling.  After all, you probably earn more profit in some areas than in others.

You have a competitive advantage:  According to a MMA/Forrester/ANA study, 20% of B2B marketers don’t yet measure the ROI of their marketing programs.  In other words, you have a competitive advantage over 20% of your competition!


Quality trumps quantity:  You’ll benefit your company and improve your marketing programs more with a few fine-tuned measurements than a handful of inaccurate, inconclusive metrics.  Start in small, bite-sized chunks, and go from there.


What you put in is what you’ll get out:  When you strategically invest your time and financial resources in developing a marketing measurement model, you position yourself for future success.  Optimising your marketing leads to increased company sales, profits, and market share. 

Would you like 20+years of marketing magic applied to YOUR business?
Then contact Sonja NOW - 083 256-0378   |   This email address is being protected from spambots. You need JavaScript enabled to view it.

Next week:
How Much Are Your Customers Costing You?