Projecting ROI (Return on Investment) for a B2B (Business-to-Business) lead generation digital marketing engagement involves a mix of historical data, industry benchmarks, and calculated projections based on your specific marketing strategy and goals. Here’s a step-by-step guide on how to project ROI for such an engagement:
- Understand the Marketing Funnel (if possible, use historical data):
- Awareness: Number of impressions, visits, or clicks.
- Interest: Number of leads generated, resources downloaded, subscribers, etc.
- Conversions: Number of leads qualified or nurtured.
- Closed Won: Number of leads that become customers.
- Determine the Cost:
- Total Campaign Budget: Sum up all costs, including platform costs (e.g., PPC spending), creative costs (content creation, design), technology costs (marketing automation software, CRM), agency fees, and any other associated expenses.
- Cost Per Lead (CPL): Divide the total campaign budget by the number of leads generated.
- Determine the Value:
- Average Sales Price (ASP): The average price at which your product or service is sold.
- Lead to Customer Conversion Rate: The percentage of leads that convert into paying customers.
- Value of a Lead: Multiply the ASP by the Lead to Customer Conversion Rate.
- Calculate the ROI:
Remember to multiply the result by 100 to get a percentage.
- Adjust for Lifetime Value (LTV):
- If you know the LTV of a customer (i.e., the total projected revenue from a customer over the duration of their relationship with your business), adjust the value of a lead and ROI accordingly.
- Factor in Soft Metrics:
- Brand awareness, market share, customer satisfaction, and other intangible benefits may not have a direct dollar value but can significantly impact ROI in the long term.
- Use Historical Data and Industry Benchmarks:
- Compare your projected ROI with past campaigns or industry benchmarks to validate your assumptions and make more accurate projections.
- Iterate and Optimize:
- As the campaign progresses, collect data, adjust your strategy, and refine your ROI projections. Digital marketing is dynamic; continuous optimization will improve ROI over time.
- Regular Reporting:
- To ensure accuracy in your projections, regularly compare actual results with projected ROI. This will allow you to adjust your strategies in real time and keep stakeholders informed.
Remember, while ROI is an essential metric, it’s not the only one to consider. Look at the broader picture, including brand recognition, customer loyalty, and long-term growth potential, to fully gauge the success of your digital marketing engagement.