Optimizing Marketing Strategies for Improved ROI and Business Growth
Ready to grow your business more quickly while spending less?
When it comes to maximizing your marketing efforts, you need to be intelligent about where you put your money. Throw a bunch of cash at random tactics and what you'll get in return is, well, nothing. You can't grow a business with a leaky bucket.
Marketing dollars need to be allocated strategically if you want to boost your return on investment. Spend on the right tactics and the results can be amazing. Choose poorly, and watch your revenue and profits disappear.
Here are the marketing tactics that are most effective for increasing ROI and growing your business faster.
In this post, you'll learn:
Why ROI Is Important
6 Effective Marketing Channels
Measuring Marketing ROI
Building A Strategy That Works
Why ROI Is Important
ROI is more than just a nice metric to share with investors. ROI is your business's lifeline.
It's why you're still in business today and won't be tomorrow. If you're paying $10,000 a month for marketing but only bringing in $5,000 a month in revenue, you're losing money. That can't go on forever. That's not growth.
Marketing ROI has become the biggest focus for marketing leaders these days. It's reached a point where 83% of marketing leaders feel the pressure to demonstrate ROI.
Business Growth
If you've been in business for a while, you know that growth doesn't just happen automatically. Growth only occurs when you make good investments that help you to expand. By carefully managing your marketing ROI, you can:
Identify the best performing marketing channels
Scale back on the ones that suck money
Double down on what works.
Marketing is your biggest asset. The money you're currently throwing away on ineffective channels is seriously slowing down your growth. Companies that track marketing ROI typically have a 1.6 higher chance of securing more budget in the future.
6 Effective Marketing Channels
All marketing channels aren't equal in their ability to create value. In fact, some marketing channels are outright terrible. And yet businesses continue to throw money at them.
Here are 6 marketing channels you should be using to increase ROI and help your business grow. Some are paid, some are free. Some take time, others give fast results.
Email Marketing Is #1
The top-performing marketing channel by far is email marketing. On average, businesses earn $42 for every $1 spent on email marketing. That's an insane 4200% ROI.
Email marketing works because you're sending your message to people who already opted in. They signed up for your newsletter because they're interested in your brand. Send relevant messages and your business will see results.
Personalization and segmentation are critical here. You don't just blast a newsletter to your entire list. You send the right messages to the right people at the right time.
Pay Per Click Advertising
Paid advertising is all about fast results. If you want growth today (while you work on building your long-term brand), paid ads are the way to go.
Google Ads return an average of $2 in revenue for every $1 spent. 200% ROI. That's pretty good. You can boost ROI through PPC strategies by employing effective optimization techniques.
PPC is amazing because the results are instantaneous. You know within a few hours whether a campaign is working or not. If it's not? Stop it and move on to the next idea.
Content Marketing and SEO
Content marketing and SEO are slower to build than paid ads, but the payoff is huge. Companies that blog regularly see 13x more positive ROI compared to those that don't. SEO brings in $22.24 in value for every $1 spent.
Content is powerful because it builds trust and authority with your audience. When people find your helpful content on Google, they are far more likely to buy from you. Content works 24/7. Write a great blog post and you can keep bringing traffic and new leads in for years.
Measuring ROI
Most businesses are measuring their marketing ROI the wrong way. They look at "vanity metrics" like impressions and clicks instead of actual revenue.
What you should track instead:
Revenue by channel
Customer acquisition cost
Customer lifetime value
The ROI formula itself is simple: ROI = (Revenue – Marketing Cost) / Marketing Cost x 100
If your marketing campaign spent $1,000 and generated $5,000 in revenue, your ROI is 400%. You must track ROI for each marketing channel individually. Break your marketing spend down by email, PPC, social media, and content, and track the revenue that each area produces. The attribution problem is one of the most significant challenges in measuring marketing ROI.
Take this example customer journey:
Saw an ad on Facebook
Clicked through to your blog post
Signed up for your newsletter
Purchased a month later after receiving a discount email.
Which channel deserves credit for that sale? Attribution models give partial credit to each "touch point" along the way. It's far from perfect, but it's better than giving all the credit to the last click.
Building A Strategy
You now know which marketing channels produce the highest ROI. Let's put that knowledge into action and talk about how to build a marketing strategy that actually works.
The strategy framework is simple:
Start with the channels that already work for you.
Diversify to reduce risk.
Test, measure, and optimize continuously.
It doesn't get more basic than that. If email marketing has produced a 4,200% ROI for you, then email needs to be a big part of your business's marketing strategy.
You still need to spread your bets a bit, though. Diversification is key. Mix email with paid advertising, content marketing, and social media. If one channel suddenly stops performing, you won't be left high and dry.
Test and Optimize
The key to improving ROI isn't some new marketing trick. It's constant testing and optimization.
The fastest growing businesses are also the ones that are constantly testing and optimizing everything. Change one line of ad copy. Send two versions of an email newsletter and measure which gets better results. Try different types of content.
If you aren't testing and optimizing, you have no idea what you should be doing more of. Measure every step along the way and double down on the stuff that works.
Retention > Acquisition
You know the biggest secret to improving marketing ROI? Stop losing customers.
Acquiring a new customer is 5x more expensive than retaining an existing one. And yet businesses pour endless time and money into acquisition while ignoring retention.
Retention-focused companies invest heavily in:
Customer service
Regular email contact
Loyalty programs with rewards for repeat purchases
Personalized recommendations based on purchase history
When you keep your existing customers happy, your marketing ROI will explode. You're now amortizing your customer acquisition costs over a much larger number of purchases.
Summary
ROI is the most critical metric for businesses. Without excellent marketing ROI, your business will die. Period.
This post showed you which marketing channels produce the best ROI and how to build a marketing strategy around those channels.
If you're not measuring your marketing ROI already, start today. Track your results for 90 days, then double down on what works. That's how you build a marketing strategy that works for your business and keeps your revenue and profits growing over time.