Mar 3, 2023
Measuring return on investment is one of the essential elements of any business. If you are unaware of your spending and profit, you will not be able to lead a successful business efficiently. This is especially important if you are launching a new product. With that in mind, here is everything you need to know to measure the ROI of your promotional product campaigns.
Launching a new product is a big deal in the business world. You are expanding your offer and providing customers with something new. Every business depends on its motivation to succeed, creativity to release new products, attract new customers, and also keep existing ones. If a product does not deliver, a company will lose money, and a lot of opportunities will go to waste.
That is why you need to measure the ROI of your promotional product campaigns. If you notice that you are not making a profit, you will have to make some adjustments.
Now that we know the "why," let's focus on the "how.” There are a couple of necessary steps for measuring the ROI of your promotional product campaigns. You need to:
Let us take a closer look at these steps to learn why they are so important and how to do them.
It is impossible to organize and run a successful marketing campaign and a product that works without knowing what you want to achieve. This is a lost opportunity that will not contribute to your business. It can also waste resources and, even more importantly, time.
When you define an objective, you can track it through various stages and make sure your campaign is doing good. Some examples of campaign goals include increasing brand awareness, boosting sales, generating more leads, increasing organic traffic, etc.
Furthermore, remember that you want to set SMART goals. You want to measure your campaign's success accurately, and SMART goals are the best way to do it.
Every campaign must have a budget. That is crucial because you want to limit the spending in order to increase the profit. To determine your budget, you need to include all potential expenses, such as product costs, shipping and storing expenses, marketing costs, and much more. You need to create a forecast of potential expenses and then include a small buffer in case of unpredicted costs.
Once you set this budget, you should do everything you can to stay within its limit. If you notice that you need a lot more resources for maintaining the campaign, it is crucial to revise your budget strategy as soon as possible.
Metrics tell you how your campaign is performing. Now you must look at your goals and determine the most relevant metrics. You could track more than a thousand metrics, so it is essential not to waste time on irrelevant ones.
When it comes to a promotional product campaign, consider the advertising channels you use. You would want to measure relevant social media metrics, organic traffic on your website, sales and leads efforts, customer feedback, and so on. The idea is to set up an effective landing page for your product. Research how to make a Google Ad landing page in WP, and you will have an essential source of information to analyze.
These metrics will help you to improve your campaign and fix immediate issues. You need to use analytics tools like Google Analytics to measure all critical KPIs.
To calculate the ROI of your promotional product campaigns, you need to use the formula:
(generated revenue - campaign cost) / campaign cost * 100
Remember that you should only count revenue generated by the campaign. So, if you made $25000 in revenue, and your total campaign cost was $10000, the formula would look like this:
($25000-$10000) / $10000 * 100 = 150%
That would tell you that your ROI is 150%, which is excellent. If you notice that your ROI percentage is low, you need to figure out why and solve the problem.
When we talk about making changes to your campaign, you need to figure out how to adjust the budget to improve the ROI. This includes eliminating some expenses to reduce the overall cost of the campaign. You need to do a campaign analysis and determine what elements are wasting the most money. You must also consider whether those expenses contribute to the campaign or not.
The best strategy is to use A/B testing. You take a small element of the campaign, create two different versions, and test them to compare the results. Whichever performs better is the one you keep. Then, you repeat this process until you substantially improve your campaign as much as possible.
These small changes will help you to reduce costs, increase the efficiency of the campaign, attract more customers by creating buzz, and increase the ROI. No campaign can make it without testing, market research, and various changes that happen over time. That is just how the process works. Now that you know that, make sure to regularly monitor your campaign metrics and act as soon as you see a drop in the statistics.
As a final piece of advice, remember to be diligent when managing your campaigns. The success of the business depends on your efforts. Use these strategies and resources to measure the ROI of your promotional product campaigns, and always know what your profit is. This is especially important for small businesses and companies with limited resources. Many startups fail because they cannot use their funding to make a starting profit cleverly. If you keep your ROI in check, you will avoid these unpleasant issues and build a prosperous future for your company.