Return On Investment.
They are used often and engrained into the minds of many.
The infamous question: “What’s the ROI?”
That’s the data that’s used to make decisions, right?
Another word for ROI is value. ROI, however, defines the specific monetary type of value.
It’s a valid question with an answer that, for the record, is usually a guess.
The answer to what’s the ROI is always, by default, “it depends”.
Fine, maybe there are some unique cases where you can immediately and with extreme accuracy determine the ROI.
But let’s call it what it is: it’s a guess based on many assumptions.
(The ROI can be more accurately calculated post-project launch with the right tools)
Example of ROI
What’s the ROI of a piano to you? Not the value. How much cash does it put in your pocket?
You might be thinking, “not much, I don’t play piano.” Or, you might be thinking, “I’m a great piano player, it helps me earn $600 a week.” (Great!)
Assuming the ROI of a piano isn’t high for you, I have a different question.
What’s the ROI of a piano to Stevie Wonder?
Answer: He is arguably one of the greatest piano players of the 20th century (and more). (Thus, very high ROI)
What does digital marketing have to do with a piano?
To recap: the ROI of a piano may not be much for you, but to Stevie Wonder, it’s extremely high. (It’s his life)
Why? It’s how Stevie Wonder plays the piano.
If you want incremental growth, play by the rules, follow the systems, and be ordinary.
There is nothing wrong with that (if that is what you want).
I know I don’t want that. I want to leave a dent.
At Yoko, we build for impact, and we help you understand that impact.
Call it ROI, call it value, or call it impact – but I’m talking about numbers.
Questions to assess digital marketing ROI
To keep it simple, we’re speaking to digital marketing ROI conducted through the website (although, these questions apply to many different types of marketing).
Here are a few common questions that help us understand the impact we create for our clients:
- On average, how much does each customer spend with you?
- How many visitors does the website get?
- How many leads come in through the website?
- What’s the conversion ratio between visitors and leads?
- What’s the ratio between how many leads that convert and don’t?
- … why?
- …, …, why?
We ask a lot of questions.
Why? Because we focus on impact.
The more we understand, the better we help our clients be understood, and the greater they are understood the greater impact they can create.
Oh, and so we’re on the same page, we help organizations understand themselves, too.
We help them see how the numbers play out and we help them articulate the impact their digital assets are creating.
Since we often work with larger organizations, we speak to many people and we ask questions that help micro-areas of organizations evolve.
How to calculate the digital marketing ROI
As a reminder, this is a guess, with several assumptions.
But, the basic formula is this:
[Average spend per customer] multiplied by [average number of leads that convert from the website on a monthly basis]
When we have a basic idea of what is currently happening, we can then predict that a more effective website will increase leads per month (thus increasing amount of return).
The assumptions take place in various technology areas from SEO algorithms, to the organization’s ability to deliver on their promise, and beyond. With our care and intimate understanding of the process, we stay around post-launch to observe the metrics and make sure that the ROI is going up.
We’re not here to make a quick buck. We’re here for the long-term.
The intangible value to consider
Although monetary return is one metric to consider, there is another more intangible metric that needs to be considered: time.
Time, our most valuable asset, measured in seconds, needs to be valued.
We uncover opportunities and processes that we can streamline on the website to save time.
Sometimes that is reducing the amount of phone calls from website visitors (and freeing up time of operators). Sometimes that is reducing the amount of time that it takes to get updates on the website.
To recap, when determining ROI, consider the amount of monetary value that is created and consider the amount of time that can be saved.
When you’re able to save time, you can allocate that time to other areas to further the growth of your organization.
Want to know more about the ROI of your website and how to make it better? Contact us now.