Sales and Marketing Q&A Forum

Post: Return on investment for advertising

Q) How much revenue should your advertising generate as a reasonable ROI?

Answered by Jackie Jarvis, MarketingCo.biz,

I would say that you should get enough of the right kind of leads and enough business to make it worth spending the money on the advertising. Obviously the more you get the better.

If you don’t get any results at all then you should first analyse why and then stop it if your reasons are not things that will make a big difference. Powerful headlines and incentives to take action do influence rates of response significantly.

You should get an ROI that is ultimately profitable, otherwise it is not worth doing. You will need to find ways of measuring the responses you get so that you know exactly what kind of results each advertisement campaign generated. Perhaps you could ask each customer how they heard about you, or which campaign they found the most helpful.

Special offers, special telephone numbers, reference numbers, asking people where they heard about you are all ways of measuring the return you get. You will also need to follow though on the leads and monitor what they ultimately resulted in. If your adverts generate one lead but that lead ends up as a profitable piece of work then it was worth doing.

It is worth bearing in mind that advertising doesn’t always work immediately and may take a continued and consistent effort over time to generate the kind of results that you want. However don’t just advertise out of habit, if it does not ultimately generate you enquiries that make you a profit stop it. There may be better ways to spend your budget.


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