1 on 1 marketing is everything a company does to acquire customers and maintain a relationship with them. It is not an exact science, but it is getting better. The biggest question businesses have pertaining to their internet marketing 1on1 campaigns entail what return on investment (ROI) they’re getting for the money they spend.
Of course, there are different ways of answering this question depending on how you view it. And that’s precisely what we are out here to help you with. Below are some of the important things you should know on calculating the return on investment of a 1on1 digital marketing.
How Do You Calculate Simple ROI?
The most basic way to calculate the ROI of a 1on1 marketing campaign is to integrate it into the overall business line calculation You simply take the sales growth from that business or product line, subtract the marketing costs, and then divide it by the marketing costs.
While the simple ROI is easy to do, it is loaded with a pretty big assumption. It assumes that the total month-over-month sales growth is directly attributable to the 1on1 internet marketing campaign.
For the marketing ROI to have any real meaning, it is important to have comparisons. Monthly comparisons, more so the sales from the business line in the months prior to the campaign launching, can help show the impact more clearly.
Challenges with Marketing ROI
Once you are done with a fairly accurate calculation, the remaining challenge is the time period. Digital marketing 1on1 is a long-term, multiple-touch process that leads to sales growth over time. The month-over-month change we were leveraging for simplicity’s sake is more likely to be spread over several months or even a year.
The ROI of the initial months in the series may be flat or low as the campaign starts to penetrate the target market. As time goes by, sales growth should follow and the cumulative ROI of the campaign will start to look better.
Another highly notable challenge is that many 1on1 marketing campaigns are designed around more than simply generating sales. Marketing agencies know that clients are results-oriented, so they get around weak ROI figures by adding in more of the soft metrics that may or may not drive sales in the future. These can include things like brand awareness via media mentions, social media likes, and even the content output rate for the campaign.
