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Is A SMART Goal of 300% ROI a SMART choice?
We initially ask potential new clients one simple question:
If they have a marketing system in operation, their answer is likely to reference their current system’s performance. For example, a typical answer is:
However, what if you don’t currently have a marketing system and your current marketing budget is, therefore, $0?
Is 3x ROI a Realistic Starting Point for a ‘New’ Marketing System?
Banks are currently offering around 2% interest rates on a 12-month deposit.
Therefore, is it realistic to expect a 300% annual return on an investment you make in a marketing system?
Our answer to this question is a resounding ‘YES‘!
However, our answer of “YES” is conditional. Before outlining the conditions let’s remind ourselves of the meaning of a SMART goal. ‘SMART’ is an acronym with letters standing for:
- S = Specific
- M = Measurable
- A = Achievable
- R = Relevant
- T = Time-Bound
With this in mind, the question becomes “Is a 3x ROI in 12 months an achievable goal for a brand new marketing system?” The ‘YES’ answer is dependant on the answers to the following 3 questions:
- What is your ‘Statement Of Value’ and is it meaningful?
- Is your current sales process working well?
- How do you define your ‘investment’?
What is your ‘Statement Of Value’ and is it meaningful?
A ‘Statement Of Value’ is a close relative of the ‘Unique Selling Proposition’. However, while the USP is product-focused, the SOV is customer-focused.
One of the first things we identify when working with a new client is exactly how they are able to add meaningful value to their customers.
If you can articulate this, you’ll be able to use a digital marketing system to generate leads.
Is Your Sales Process Working Well?
When working with a new client on a tight budget we will usually implement a marketing system in 2 stages:
- Stage 1 – Lead Generation
- Stage 2 – Lead To Customer Conversion
Since Stage 2 is implemented some months after Stage 1, it is important that our client is able to manually convert leads into customers.
This will ensure that we see a 3x ROI from Day 1 – even before Stage 2 is implemented.
How Do You Define Your ‘Investment’?
This is an important question if you’re on a tight budget.
Although our marketing solutions are custom designed and built, it is most likely that we will use Google Ads to generate leads, customers and your ROI.
In this case, you should only use the Google Ads spend to calculate your ROI. Do not use one-off development or set-up costs:
ROI = (Revenue Generated In Month) / (Monthly Google Ads Spend)
- You pay your marketing agency a 1-off website development fee of $5,000.
- You pay your marketing agency $500 /month to manage your marketing system
- You pay Google a further $600 /month for advertising.
- You measure a Revenue increase of $2,400 for the month as a result of the marketing.
Your ROI would be 4x (= $2,400 / $600).
With all of this clear, it is reasonable to expect a 3x ROI from a brand new marketing system.
When Can I Start Getting Excited?
Marketing Clinic delivers marketing systems that are scalable. Therefore, if you’re able to achieve a 3x ROI with a $500 investment. You’ll also receive a 3x ROI with much larger investments.
For example, if you’d like your marketing system to deliver $120,000 of annual revenue ($10,000 per month), you should be prepared to invest $3,333 per month on Google Adwords.
Similarly, a $10,000 monthly investment would yield an annual return of $360,000.
Now it’s time to get excited!