It’s a no brainer that digital marketing strategies are more effective than the traditional marketing ones. But by how much? This is the most common question that I have been asked from my clients when we meet for the first time. How can you effectively calculate the return on your hard earned cash from digital means?
It’s an easy task for the ecommerce sites to calculate the ROI with the direct sales. You can see all that website traffic converting into clicks ultimately resulting in sales of your products. For every dollar invested, you can calculate the return on that dollar. “But then what about my restaurant? How can I see where’s my cash is going that I am spending on digital marketing?”, asked an owner of a fast food restaurant in Downtown Toronto.
For businesses, which deal in services like restaurants, Doctors, Physiotherapists, calculating ROI is a little different process. For service based businesses the efficacy of digital marketing is calculated through business awareness, website hits, audience engagement and followership.
How much of your target audience is aware of your business and willing to do business with you is an effective measure of your ROI. Below are some parameters on which you can measure your ROI-
- The leads generated through the contact us form,
- of phone calls to your businesses by prospective customers
- of people asking for directions to your business
- Followership on social media platforms
- Audience engagement
- Website traffic
Although these parameters do not result in as quantifiable results as in the case of e-commerce websites, nonetheless, these measure your business’ digital presence. The more the digital presence, the more the no. of new customers you will get.
When it comes to the calculating the ROI of digital marketing, you must consider each and every aspect of expenses you have paid for the phone calls, flyers, freebies, give away stuff across what you have gained via digital marketing.
International giants like Cadbury has gained 20% hike in their sales by just spending 7% of their amount on online advertisements than TV ads. In addition to the market giants, it’s a proven fact that when it comes to the smaller markets and limited number audiences the digital marketing tools has always played an important role in amplifying the number of customers.
The return of investment of digital marketing or online marketing is always high because of:
- Higher conversion rates since its highly customized to your targeted audience
- Cost effective as ppc ads can be started with a low budget unlike traditional marketing media like TV ads, radio jingles, call centers, etc which can be quite expensive.
- Highly targeted audience
- Dynamic- Unlike traditional billbords or tv ads which serve one ad-fits-all, customers in different stages of marketing cycle can be targeted with different ads.
- Measurability- unlike traditional marketing techniques, each digital marketing technique is measurable to determine its efficacy.
- Can get results in more quickly
Digital marketing is a very effective tool especially for small businesses. With a limited budget at hand, small businesses can leverage digital means to reach directly to their target audience and establish a connection. With the help of advanced analytics, they can monitor and measure effectively the return of every marketing dollar they spend. Because of these reasons, more and more businesses are getting on the digital marketing bandwagon. If you are not on already, hop on before its too late!
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