How are you supposed to figure out which acronyms actually matter for your marketing? It doesn’t matter who you are or what you do, in the grand scheme of things there’s only one acronym that really matters - ROI. So, what is ROI anyway?
ROI (or Return On Investment) is a measure of loss or gain on an investment in comparison to the actual amount of money spent in a particular campaign, activity, tool or product. Typically, you’d express your ROI as a percentage, but often ROI is used synonymously with net-profit or net-loss. ROI is a bit more specific than that though...
Here’s an example - if you’ve spent $100.00 on Google AdWords per month and those ads generate you $350 worth of new business, then your net profit that month is $250. To calculate the ROI of that spend you need to divide your net profit by the initial cost of investment (the cost of the Ads) to get your ROI percentage.
So, using the Google Ads example:
ROI = Net Profit (250) / Investment (100) x 100 = 40%
So why should I care about ROI?
You really should care about ROI as (contrary to popular belief) marketing is not all about brainstorms, bean bag chairs and throwing mud at the wall; it’s about seeing what mud actually sticks….and also bean bag chairs. It’s extremely unlikely that you’re sticking all your eggs into one basket when it comes to your marketing strategy. No one just does Facebook ads. (If you are just doing that, maybe you should give us a call!) By calculating the ROI of each of your marketing tactics, you can easily identify where you should be spending more money and where you should consider spending less money (or even stop spending money altogether).
By doing your ROI calculations, it’s easy to see that SEO is the most profitable, but not necessarily the cheapest. Hopefully, by reading this, you’ve gained some insight on how to figure out your return on investment. And if you find this too complicated, we understand. We live and breathe SEO & ROIs so let us take that on for you, so you can concentrate on what you do best running your Tax Business.
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