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How to Measure Marketing ROI and Stop Wasting Money on Marketing · Profit Points Podcast

• 0:09
  SPEAKER_00: If you're a profit designer who wants to actually understand what is happening in your business financially, not just survive it, but genuinely get it, you're in the right place.
• 0:20
  SPEAKER_00: Every episode covers one concept, uses real numbers, and ends with something you can actually do.
• 0:26
  SPEAKER_00: That's the deal.
• 0:27
  SPEAKER_00: Let's talk about today's topic.
• 0:31
  SPEAKER_00: Let me ask you a question.
• 0:33
  SPEAKER_00: How much did you spend on marketing this year?
• 0:38
  SPEAKER_00: Now, how much profit did it actually generate?
• 0:43
  SPEAKER_00: If you can't answer that confidently, you're not alone.
• 0:46
  SPEAKER_00: But you are flying blind.
• 0:49
  SPEAKER_00: Today we're going to talk about how to stop guessing and start measuring your marketing ROI so you can invest smarter and stop wasting money on things that don't move the needle.
• 1:03
  SPEAKER_00: Hi, I'm Megan, your accounting sidekick, and this is the Profit Points Podcast, where we uncover the areas in your business that directly affect your profit.
• 1:13
  SPEAKER_00: Here's the reality: most business owners don't know if their marketing is working because they're tracking the wrong things or not tracking anything.
• 1:25
  SPEAKER_00: They look at things like views and likes and followers, but none of that tells you if you're actually making money.
• 1:34
  SPEAKER_00: Those are sometimes what we call vanity metrics.
• 1:37
  SPEAKER_00: You may have heard the term.
• 1:39
  SPEAKER_00: The goal isn't to do more marketing, it's to make sure that the marketing you are doing is actually working.
• 1:47
  SPEAKER_00: So, how in the world do we do that?
• 1:49
  SPEAKER_00: I'm so glad you asked.
• 1:52
  SPEAKER_00: Here are three steps you can take to determine if what you're doing is actually working.
• 1:58
  SPEAKER_00: Because trust me, I know this is part one of the areas of business that is so hard to know how to do, what to do, and how to track, right?
• 2:09
  SPEAKER_00: So we are gonna talk through three steps that you can take to start working on, start putting in place the measurements that you need to really see if you have a return on investment, your ROI on your marketing efforts.
• 2:24
  SPEAKER_00: So step one is to know what you're measuring.
• 2:28
  SPEAKER_00: Marketing ROI means basically one simple thing.
• 2:32
  SPEAKER_00: How much revenue did you make for every dollar that you spent?
• 2:37
  SPEAKER_00: So for instance, if you spend a hundred or a thousand dollars and made five thousand dollars in sales based off of that campaign or that networking group or the consultant that you your ads, whatever it is, you spent a thousand dollars, you made five thousand dollars in sales, your ROI, your return on investment is five times what you spent or 400%.
• 3:07
  SPEAKER_00: The problem is that most owners don't know their ROI because they don't connect their sales to their specific efforts.
• 3:17
  SPEAKER_00: So, first things first, you gotta know what you're measuring.
• 3:21
  SPEAKER_00: Step two is that I just moved my thing.
• 3:27
  SPEAKER_00: So stop chasing the vanity metrics.
• 3:29
  SPEAKER_00: Step two is stop chasing vanity metrics.
• 3:32
  SPEAKER_00: I don't memorize all this, you guys.
• 3:34
  SPEAKER_00: Uh, it is written down.
• 3:36
  SPEAKER_00: Okay, so legs don't pay the bills, but leads do.
• 3:40
  SPEAKER_00: Engagement matters, but only if it turns into conversations and conversion.
• 3:47
  SPEAKER_00: So think of those C's.
• 3:49
  SPEAKER_00: Your engagement is great, but if it's not leading to a booked appointment, if it's not leading to a DM, you're not conversating, you're not converting those things into something that's that actually makes a sale, right?
• 4:04
  SPEAKER_00: And it doesn't even necessarily need to be that can be a conversion to a link or a funnel or you know, something like related to that.
• 4:12
  SPEAKER_00: So you got to make sure that your engagement turns into those things.
• 4:16
  SPEAKER_00: And we see this all the time.
• 4:18
  SPEAKER_00: I've experienced it myself.
• 4:19
  SPEAKER_00: You know, we get really obsessed over our reach, those kind of numbers, those vanishing metrics, but we ignore whether those views and those likes and sometimes even the comments turn into actual clients.
• 4:33
  SPEAKER_00: So you gotta make sure that you're tracking this, that you're not just chasing the views and the likes and you know, all of that, that you're actually seeing the conversion piece of it happening as well.
• 4:47
  SPEAKER_00: Um, and then three, audit your marketing spend.
• 4:50
  SPEAKER_00: So go line through line what you've been spending on marketing this year.
• 4:55
  SPEAKER_00: Look at things like ads, softwares, subscriptions, contractors.
• 5:02
  SPEAKER_00: If you do any sponsorships, go through all of those things that you spend on marketing and then ask yourself what's producing results and what's just making noise.
• 5:12
  SPEAKER_00: And sometimes that can be a hard thing to ask, right?
• 5:15
  SPEAKER_00: You might realize by doing this that you can get a better ROI by doubling down on one or two things versus trying to do 10 different things or use 10 different avenues, um, 10 different areas of uh marketing, you know, or subscriptions or whatever it might be.
• 5:35
  SPEAKER_00: So think about that, look at it, take a second to analyze and reflect.
• 5:42
  SPEAKER_00: Um, one of our clients we did this with, we helped with, she was spending about$1,200 a month across four different platforms.
• 5:51
  SPEAKER_00: She was paying for things like her email, Facebook ads, networking memberships, paid directories.
• 5:58
  SPEAKER_00: So we took a look at her CRM and we evaluated where her leads were actually coming from.
• 6:05
  SPEAKER_00: She was using tagging, so she was able to, you know, easily look at where these leads were coming from.
• 6:12
  SPEAKER_00: And she learned that, or we learned as we were looking at it together, that about 80% of her new clients this past year were coming from referrals and networking, not her ads.
• 6:26
  SPEAKER_00: So we cut the ad spend and reallocated that money into relationship building efforts.
• 6:34
  SPEAKER_00: And her leads nearly doubled within the past three months, which is pretty crazy.
• 6:41
  SPEAKER_00: So she didn't have to spend any extra effort in terms of adding different things.
• 6:45
  SPEAKER_00: She actually saved more time because she didn't have to worry about optimizing these ads and you know the ad spend that she was using.
• 6:53
  SPEAKER_00: She reallocated that time and that root those resources to relationship building efforts, and she was able to significantly improve her leads.
• 7:03
  SPEAKER_00: So she worked smarter.
• 7:05
  SPEAKER_00: We've made smart adjustments so we could make more informed, a more informed allocation of her resources, her ROI on her marketing spend.
• 7:16
  SPEAKER_00: Now, you might be cutting yourself out here because you don't have a CRM in this example, or you haven't been tracking this information to even evaluate where your leads are coming from.
• 7:27
  SPEAKER_00: But I want to just encourage you to not tap out.
• 7:29
  SPEAKER_00: Don't tap out.
• 7:31
  SPEAKER_00: This is still relevant, a relevant conversation for you.
• 7:34
  SPEAKER_00: And you can use something as simple as a spreadsheet or you know, tags in your accounting software, even, or in your project management system or whatever it might be, like you can add pieces in there where you can start tracking where your sales, where your conversions, where they're coming from.
• 7:52
  SPEAKER_00: Um, so you can start identifying where those leads and those sales um are originating.
• 7:59
  SPEAKER_00: If you have a scheduling link, a lot of times you can build in questions on that scheduling link.
• 8:05
  SPEAKER_00: One of the questions you can ask is where did you hear from us?
• 8:08
  SPEAKER_00: You know, where did you hear from?
• 8:10
  SPEAKER_00: Where did you hear about us?
• 8:12
  SPEAKER_00: Excuse me, not from us, where did you hear about us?
• 8:16
  SPEAKER_00: Who referred you, or you know, like you can have different options.
• 8:19
  SPEAKER_00: You'll see that a lot of times when you buy things online, it asks you, where did you hear about that?
• 8:24
  SPEAKER_00: How where did you hear about this?
• 8:26
  SPEAKER_00: Because that is one of the things that they go back and then evaluate a lot of times to see what their ROI is on those marketing dollars.
• 8:34
  SPEAKER_00: So go back to your recent conversions, take a look.
• 8:38
  SPEAKER_00: You can also ask them.
• 8:40
  SPEAKER_00: Like I know sometimes it can be a little intimidating, but if you have clients that you're working with or customers that you're working with more recently, you can go back and say, Hey, just wondering, where did you hear about us?
• 8:53
  SPEAKER_00: How did we get connected?
• 8:55
  SPEAKER_00: Um, and then you can start building some actual data from that, and then build in like the scheduling link question, or you know, the different things on your spreadsheet that you might track, or you see, if you have a CRM, I know sometimes it can be hard to keep up with.
• 9:12
  SPEAKER_00: Start making intentional things, steps towards doing that because that information, that data is really going to help you start to identify whether or not your money is going in the right places, and if not, how you can make adjustments.
• 9:26
  SPEAKER_00: So, some action steps for you to do today is to pick one marketing activity.
• 9:32
  SPEAKER_00: Maybe it's your ads, maybe it's networking groups, maybe it's your social media, and calculate.
• 9:39
  SPEAKER_00: Look at the revenue generated.
• 9:41
  SPEAKER_00: If you have this data, you can look at what revenue was generated from those different avenues and then divide it by the cost.
• 9:49
  SPEAKER_00: So if you look at the last six months, how much sales came from networking, how much sales came from ads, whatever it might be.
• 9:56
  SPEAKER_00: If you have that data, look at it, divide it by the cost over that six months, and that is gonna give you a rough ROI on what your ROI is for those marketing efforts.
• 10:07
  SPEAKER_00: You wanna also track how many conversations or sales calls are you getting from each marketing source.
• 10:15
  SPEAKER_00: Um, instead of how many likes or followers get, we want to look at what is actually being produced or converted from those things, or the and they not necessarily need to be conversions, full conversions, but you want to convert them into leads or what converted into leads, you want to track that.
• 10:34
  SPEAKER_00: Okay, and then finally, and final action step you can take is eliminate or pause one underperforming marketing expense this month, and then reinvest those dollars into something that is working better, and then see how that affects your results.
• 10:52
  SPEAKER_00: Marketing is only investment when it gives you a return, everything else is just an expense.
• 10:58
  SPEAKER_00: Marketing is also a long game and a game of testing and adjusting.
• 11:07
  SPEAKER_00: It's a lot of things you test, measure, adjust, um, or measure, test, adjust, whatever order that is.
• 11:13
  SPEAKER_00: Point is is that a lot of it is trial and error.
• 11:16
  SPEAKER_00: You got to come back and you gotta re-evaluate it.
• 11:18
  SPEAKER_00: So the more data that you take, intake to be able to assess or you know, market doesn't even have to be a lot of data, but just like these high points of here are the different avenues or the different ways that we're marketing.
• 11:33
  SPEAKER_00: Here are the where our leads are coming from, here's the information for that, and then here is what actually converted into a sales.
• 11:41
  SPEAKER_00: So if you can just start tracking those pieces, you'll be able to have a better idea of what your ROI is on marketing.
• 11:48
  SPEAKER_00: So don't guess your way through this, through the growth.
• 11:52
  SPEAKER_00: You want to make sure you're measuring it.
• 11:54
  SPEAKER_00: Every dollar in your business should have a job, and marketing dollars are no different.
• 12:01
  SPEAKER_00: We want our money to have a purpose or an explanation or a job or aka a job, right?
• 12:10
  SPEAKER_00: Okay, so a couple of things that you can do to continue the conversation is to join my Facebook group.
• 12:18
  SPEAKER_00: I have a lot of resources in there, and we are going to continue to roll that out.
• 12:23
  SPEAKER_00: So please join, please join if that would be at all helpful to you.
• 12:28
  SPEAKER_00: You can also comment points for our free profit points mini evaluation.
• 12:34
  SPEAKER_00: It's gonna help you identify what is working and what is not in your business or the areas that you can improve in the different profit points of business, which is what we talk about here on the profit points podcast.
• 12:49
  SPEAKER_00: And then finally, or in addition to, um, you can also book a call with me.
• 12:56
  SPEAKER_00: So no obligation, just a chat to help you get a little bit more clarity and some value in your own business so that you can help improve and grow and scale the way that you envision.
• 13:08
  SPEAKER_00: You can go to chatwithmeg.com, it'll take you to my website and you can book a call right on there.
• 13:14
  SPEAKER_00: All right, so that's it.
• 13:17
  SPEAKER_00: This is the Profit Points Podcast.
• 13:19
  SPEAKER_00: I'm Megan Schwann, your accounting sidekick, CEO and founder of Sidekick Accounting, helping you build a business that actually works for you and your life.
• 13:31
  SPEAKER_00: See you next week.
• 13:32
  SPEAKER_00: Bye.
• 13:33
  SPEAKER_00: All right, that's your episode this time.
• 13:35
  SPEAKER_00: Don't forget your action step.
• 13:37
  SPEAKER_00: I want you to actually do it, not just add it to the list.
• 13:40
  SPEAKER_00: If this episode was helpful, share it with a fellow business owner who needs to hear it.
• 13:44
  SPEAKER_00: And if you're ready to go deeper on your specific numbers, book a strategy call Decidekick Accounting.
• 13:50
  SPEAKER_00: Go to chatwithmeg.com, and I'll see you next time on Profit Points.