1. Marketing & ROI-Stacking The Numbers
As a marketing company, we are constantly on the lookout for new ways to generate business for our
clients. Even our clients have been known to bring up a advertising idea they saw on TV, heard on
the radio, or read in a magazine and thought it would something they would like to try as well. With
the sheer number of people listening, watching or reading these advertisements, how could it not
generate profit? Sounds simple enough, but before you spend that kind of money on a marketing
campaign, ask yourself: “What’s the ROI?”. One of the biggest mistakes we see with DIY marketers
is the lack of ROI in their marketing campaigns as well as a misunderstanding as to what ROI even
means.
Before you invest in any type of marketing you must know how to
assess ROI. ROI stands for Return On Investment. How much
money did you spend on your marketing vs. the amount of
service or product your business sells. ROI has a basic
equation: GROSS income subtracted by the $ spent on
marketing divided by that same $ spent on marketing. That
would give you a percentage of profit. So let’s say you hosted an
in-house event that generated 6,000 in services and the cost to
market the event only cost $1,500. ($6,000 - $1,500) ÷ $1,500 =
300% ROI or a 3:1 ratio ROI. Not bad, however when you
considering the minimum ROI to be deemed “break even” 2:1,
that 3:1 has some room for improvement. Here at Salon Success
Strategies, we consider a ROI of 10:1 to considered a successful
marketing campaign and strive for this kind of ROI with every
client we manage.
Now that you have a basic understanding of ROI, what are you using to track your campaign’s ROI?
Here is another in marketing mistake where the fine details add up. Have you ever found yourself
wondering why your campaign brought in an abundance of clients, but were still in the red at the end
of the month? If you are not correctly tracking your ROI, you could be wasting money on a campaign
that you think is bringing in clients, but is actually emptying your bank account.
When you start planning next month’s marketing, take some time and create a spreadsheet to help
keep a record of your campaigns income and expenses, from the biggest to the smallest. When
tracking the income, don’t forget to include up-sells, service add ons and retail sales from the client
that came from the campaign. For your expenses, don’t forget the small details. This would include
offer creation, medium designing, social media marketing integration, printing, implementation, ect…
Every piece of your marketing campaign has a value; even time has a dollar sign attached to it when
it’s taken from time that is normally spent making money elsewhere. No matter how small or large
your marketing plan, always track its ROI. This is a vital tool that will help you see what marketing
campaigns are successful and what campaigns could have their time and money spent on a proven
marketing campaign that works.
© 2012 Salon Success Strategies a division of Proven Results Marketing INC
Heather LeMere, Marketing Director with Salon Success Strategies was an owner in the beauty
industry for over 15 years. Today she heads the client marketing campaigns at Salon Success
Strategies, a company dedicated to make marketing easy for salons and spas. Through her
teachings, Heather draws on her personal experiences and gained wisdom to share with owners the
essential key factors to grow their businesses through leadership, results oriented marketing, service
excellence, & teamwork.