Over the last couple days, we’ve been discussing how to determine if your ads (and other promotional activities) are paying off. Are you making money from your promotional investments? After you’ve started tracking the ROI on advertising and promoting, you should be able to set some benchmarks for your business. What is the ROI that you expect and want to see?
What if you decide that this is a bad promotional investment?
Often, what happens after tracking the ROI on your ads is that you learn that you’re spending way too much money on an ad or a promotion and not seeing enough results. What do you do? Do you simply cancel the ad and move forward? Or, do you keep it for “brand awareness” and exposure?
The answer isn’t that simple…
It’s completely up to you!
You have to decide what you expect to get from the promotion.
If your expectation is to earn $2 on every $1 you spend, and you aren’t getting that, then you need to consider putting your money elsewhere. But, your goal may not be a dollar for dollar exchange. If you know the promotion isn’t going to lead to direct sales, but it’s a way to get exposure in your market and among your colleagues, then this becomes your goal. You may not need to see a dollar for dollar return. (As an aside: If your business doesn’t make money to justify an ROI of $0, then don’t do it! Don’t spend money you don’t have. It will get you nowhere.) You can set this as your goal. Just make sure that a) you can afford it and b) you aren’t doing it out of ego.
Freeing up your promotional dollars…
When you are good about tracking your ROI, it gives you the ability to be intentional with your promotional decisions. If an activity isn’t achieving the goal, move the money elsewhere. Find other ways to promote your business. Get creative. We often feel sunk because we think we need to keep an ad. But, when we have that money to do other things for our business, it can be quite liberating.
ROI insight is power!