Think You Can't Measure Marketing ROI Without Online Sales? Think Again.
For businesses that sell products online, measuring the Return on Investment (ROI) for their digital marketing efforts is fairly straightforward. But what about companies that don’t sell products online? Many companies operate less directly, offering products or services where the purchase isn’t completed online. Maybe the customer needs to visit your store, call you, or submit a form to start the sales process. What then?
Understanding the Challenges
Companies that rely on offline channels such as phone calls or in-person interactions face unique challenges in tracking ROI. Unlike online conversions, these transactions can't be easily traced back to a specific ad or marketing campaign. This makes it harder to determine which marketing efforts are genuinely paying off.
Utilize Call Tracking
For companies that rely on phone leads, call tracking can be a lifesaver. By assigning different phone numbers to various marketing channels or campaigns, businesses can track where calls are coming from. Analyzing this data helps in understanding which campaigns are generating leads and, ultimately, sales.
Embrace Customer Surveys
Sometimes, asking customers directly about how they found your company can yield valuable insights. Simply adding a simple question on a lead form or during the transaction process can help pinpoint which marketing channels are most effective.
The Science of Guesstimating
Guesstimating can be a useful approach when precise tracking is challenging. By looking at your average conversion rates and average purchase value, coupled with a detailed analysis of your traffic sources and spend on each source campaign, you can make educated guesses on ROI.
For instance, if you know that your average conversion rate from a particular advertising medium is 2% and the average value of a sale is $100, you can estimate your ROI based on your investment in that medium. If you spend $2,000 on Facebook Ads, resulting in 10,000 website visits, and your average conversion rate is 2%, then you can expect 200 sales. If your average sale is $100, that’s $20,000 in revenue. Subtract your Facebook Ads spend and you can estimate your ROI to be $18,000. It might not be as accurate as other methods, because not every sale is going to be worth $100. Regardless, if it’s all you have, then it's a valuable way to gauge the effectiveness of various channels..
Focus on Lifetime Value
Don't just focus on the immediate sale. Understanding the lifetime value (LTV) of a customer helps you gauge the long-term ROI of your marketing efforts. Tracking repeat business, referrals, and customer loyalty can provide a broader picture of success.
Conclusion
Measuring ROI for offline sales is undoubtedly more complex, but it's far from impossible. Utilizing tools like call tracking, guesstimating, and customer surveys can bridge the gap between traditional sales methods and modern analytics. Embracing these strategies ensures that businesses not relying solely on online sales can still harness the power of data-driven decision-making.
