Business Insights
3 strategies to maximize your return on marketing

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Establishing a marketing plan that works for your business—and budget.

Marketing is an essential tool for any growing business. But finding the money for a marketing campaign can be extra challenging on a startup budget when every dollar (and minute of the day) is carefully accounted for. Fortunately, how much you spend on marketing can be less important than how effective your marketing is.

Whether you call it return on marketing investment (ROMI) or return on marketing spend (ROMS), the concept is the same: determining whether your hard-earned money is well allocated. “That’s how you become efficient: Quit spending on ideas that don’t work,” says Ivana Taylor, a low-cost marketing leader and publisher of a small business marketing website.

These days there are many ways to market your business, from old-school, in-person tactics to the latest algorithm-driven social media ads. But simply jumping on ideas and trying out strategies without forethought or data is what Taylor calls “slot machine marketing.” Like taking your chances at a casino, “do it a thousand times; you might hit on something,” she says. More likely, you’re burning time, money or both.

That’s why a little planning, research and data can go a long way to improving your marketing plan’s outcomes. Here are three things to consider to maximize your ROMI.

Establish baselines

Make sure you have a handle on your business’s benchmarks—for example, the number of leads you typically generate over a set period—so you can determine whether your marketing investment results in true incremental lift. What did the marketing dollar get you that you may not have gotten otherwise? In this way, you approach your marketing efforts systematically.

You’ll automatically get a better return on your investment if you spend less in the first place, which is why Taylor recommends choosing a lowest total cost strategy for your marketing campaign. “As small business owners, your No. 1 focus should be lowest total cost,” Taylor says. “Always be looking at that, especially as a solopreneur.”

Take a busy restaurateur who might not have a minute to spare while she’s heading up a kitchen and managing the front of house. Paying an expert to optimize search engine optimization might be her lowest total cost option since her time is money. For a fledging jewelry business owner, on the other hand, money might be tight, but time to attend trade shows or put up a booth at a local market is abundant. Either way, you first need to know precisely how much your time is worth, then choose the plan with the lowest total cost.
Use data wisely

Digital marketing strategies allow you to monitor data in real time. You can target specific customers or change marketing messages as your campaign progresses. So take advantage of the data. Taylor, for example, acquired a list of email addresses for potential webinar customers for her own business. By following the open rates on her email newsletter and continually whittling down the list to those who engaged with her content, Taylor found and focused on her target audience. She was able to find people who actually wanted to pay for her expertise.

Eliminating underperforming tactics helps you maximize your ROMI quickly. If you are using analytics, however, beware of making changes too quickly. You want to look for trends and ensure you understand your campaign’s impact over time, not just react to the first wave of data. But if a campaign isn’t working at all, then by all means, make a change quickly.
Choose what’s right for your business

Your customer is your customer—and since you’ve thoroughly researched them before you even started your marketing campaign, you know exactly what they want. Your marketing plan reflects that.

But your marketing campaigns should also be organic to you as a small business owner. “Your strategy has to be what you’re going to do on your worst day,” she says, be it content marketing, direct marketing or advertising.

Keep in mind that digital marketing isn’t the only path, even in a digital era. Algorithms change constantly and search engine trends can be difficult to keep pace with. This might mean—especially for small businesses that don’t have whole marketing departments—taking on marketing specialists (and their fees). That’s why Taylor doesn’t discount old-fashioned strategies. “Cold calling is back, conversations are back,” she says.

Remember your goals

Lastly, remember that your marketing investment might have less immediate returns. Goals such as improving brand awareness and building relationships with customers might take longer to show results. Although measuring ROI is important, also consider what ideals your brand stands for and what value you’re delivering to your customers and potential customers.

With these strategies in mind, your dollars might just go farther. “You will be spending money on marketing, but it's the right money,” Taylor says.