Deciding Marketing ROI for Finance Companies: A Guide
You don’t have to be a finance professional to appreciate the value of a good ROI. Take, for example, the insular economy of a kid’s lemonade stand: the water’s free because their parents pay the water bill. Lemons cost around .50 each, and a bag of sugar costs less than $3. That’s low overhead, and kids can make a killing selling cups of lemonade at $1 each.
Your company’s finances are more complicated than those of a lemonade stand, but the principle is the same. To make a good return on your investment, you need to make more than a dollar on each dollar spent in a marketing campaign. (Here, “investment” is the measurable amount spent on services and equipment and the immeasurable amount spent on human resources and energy.)
The only way to intentionally make a good ROI is by knowing how to measure the results of your marketing spend. What does that look like? Keep reading to find out.
Marketing ROI: What It Is and Why Companies Use It
Marketing ROI (mROI or ROMI) is a way to measure the return on investment from the amount a company spends on marketing. Because we’re a financial SEO company, we’re going to focus on digital marketing, but any method or platform that puts your brand out there (including print advertisements, billboards, commercials, etc.) can be measured using marketing ROI.
Your company can use marketing ROI to evaluate the return or value of a specific marketing program, such as a Facebook advertising campaign, or the overall return of a mix of marketing programs, such as Mailchimp email campaigns, social media campaigns, and SEO.
Planning and executing a good ROI can help you create effective marketing campaigns in the future. With so much uncertainty in the world, finance companies need all the future planning and preparation they can get.
Calculating Your mROI
If you’re a finance nerd, this will be your favorite part. Marketing ROI is a straightforward calculation with the goal of ending up with a positive number – ideally, as high a positive number as you can possibly get.
The simplest version of the equation looks like this:
Financiers with a pragmatic mindset can establish a threshold accounting for risk tolerance and cost of capital. If the figure is below that, you’ll understandably be hesitant to invest. But tinker around with the calculation; as long as you don’t end up with a negative ROI, you can argue the case for a new marketing strategy.
To set a “good ROI” benchmark, many businesses find it helpful to look at the return from similar strategies they’ve tried in the past in addition to their current sales numbers. These will help you create realistic benchmarks and goals that are tailored specifically for your company.
Why Finance Companies Need Marketing ROI
It’s unlikely for numbers-forward financiers to be skeptical of measuring and assessing their marketing spend, but if you’re still unconvinced, let us put some points forward to change your mind:
Leg Up on Competitors
Finance and SEO don’t have everything in common, but they do share a strong need for competitor analysis. Through competitor analysis, finance companies can tap into areas they never would have imagined; sometimes, all you need to do is observe what your rival is doing and emanate it in your own unique way.
Track competitors’ mROI to gauge how your company is performing against others and you’ll discover some great untapped avenues for marketing. You probably won’t find your competitors’ exact mROI spelled out for public use, but certain metrics will help you leverage your ROI:
Domain Rating (DR) Score
A website’s DR score is a measurement of the amount and quality of links that point to it. A website will have a low DR score if no websites are linking to it or if the links themselves come from websites with poor DR scores.
Basically, your DR score tells other websites (and Google) that you create quality, trustworthy content and are so trusted by other websites that they’ll link to your site from their own.
Because websites receive higher rankings by having lots of high-quality backlinks, analyze which links the site has and where they’re coming from.
Use this knowledge to create an outreach strategy or produce content that you know is likely to be picked up by another site.
Google Analytics is a powerful platform that allows you to track and measure how people find and interact with your and competitors’ sites. The tool lets you track dozens of metrics, including users, sessions, bounce rate, age and gender demographics, language and location, engagement, the source/medium they used to access your site, and much, much more.
Use this information to deduce the types of content that perform best at which times, meaning you can tailor your own marketing strategy to match what you know is successful.
Social Media Engagement
Generally, greater engagement = greater ROI. You may not be able to log in to your competitors’ social media accounts and examine their analytics, but go through their posts and take note of the comments and shares that each post receives.
Remember that ‘likes’ don’t necessarily generate as much weight as a comment or share. Evaluate what kinds of posts generate more engagement, and you’ll have a clear idea of what you can post in the future.
Better Idea of Where to Spend
mROI is a fairly granular calculation – made at the program or campaign level, your mROI will show you which efforts have a higher return and therefore warrant repetition and further investment.
You’ll also have an idea of future spending levels and where to allocate your company’s marketing budget.
For example, say you’ve spent $5,000 every six months on PPC campaigns.
You assumed they’d be fruitful, but you measure the ROI and you realize the campaign has been bleeding your company.
Now you know which campaigns to cancel or stop immediately and which to try out instead.
Justify Marketing Spend
Marketing is a significant expense for finance companies, especially if several campaigns are run at once. Chances are, the leaders of your company want to know if the results are worth the money and effort.
mROI is a great opportunity to demonstrate how marketing can boost profitability. Provide several different mROIs for several different campaigns and work with the leaders from there to decide which marketing avenues would be best for your company to go after.
Marketing ROI Matters
The truth is, finance companies need to invest in marketing to gain visibility and earn clients. But futile is the marketing strategy that is never measured or analyzed for efficacy. The other truth is, you’ve got to know how to measure marketing ROI to be confident that you’ve made the right decision.
If you still have questions after reading this guide, feel free to reach out to our finance SEO team. We’ll help you set goals and give you the tools to reach them.