Last week, we published this post where we began discussing how most people are paralyzed when it comes to advertising because they’re afraid of not seeing a return on investment, or ROI, on their advertising spending.
Perhaps they’ve tried some advertising and didn’t see any results or perhaps they don’t know what to do in order to profit from advertising.
Either way, most people look at advertising ROI all wrong.
For most mission-minded or faith-driven business owners, the goal is to spend as little as possible on advertising while still getting customers.
I was recently talking with a client who was bragging about only having to spend a low percentage of budget on marketing (well below the 7 to 10 percent recommendation for businesses). He was boasting of his profits on such little advertising efforts. I couldn’t help but think about how backwards and dangerous is such thinking.
I said, “If you’re making such big gains on low marketing budget numbers, imagine what you could do if you dumped a ton of cash into marketing.”
We see clients constantly focusing on tracking the wrong things, such as how low their cost per click is or how much their ad spend is, instead of the long term size of the results.
Instead of focusing on how little you can spend, there are other areas where your advertising attention should focus in order to get a good ROI.
Input Metrics vs Output Metrics
First, instead of centering your attention on the output — how much money do you make back — focus on your input metrics.
How much content are you producing?
How many ads are you split-testing?
How consistent are your efforts?
How much money are you budgeting for ads?
How is your messaging?
How strongly are you expressing your offer?
Focus more clearly on what you’re putting in…on what you’re in control of…and the ROI results will work themselves out.
Risk Size
Focus on expanding your risk tolerance.
If you have small risk, you’ll almost always have a small return. If you have a big risk, you have the opportunity for big return.
While we’re not proposing throwing huge stockpiles of cash at advertising before you’re ready, there is no doubt that the organizations who see the biggest ROI on ad spend are the ones who systematically and methodically increase their risk profile and put more money on the line with their advertising.
Mindset
Another area where you can rethink ROI is in your mindset.
Far too many of the business owners we begin working with expect advertising to be a magic pill. They have a “build it and they will come” attitude. It’s an, “if I spend a dollar on advertising, I should see $1,000 ROI, five minutes later” mindset.
They don’t think about follow up, nurturing, parallel prospecting, networking, multiple impressions, organic traffic, and all of the other philosophies and activities that must surround advertising in order to make advertising successful.
One of the things we help clients with is changing their mindset about how obtaining an ROI on advertising works.
Ultimately, it’s not all that difficult for most organizations to see a positive ROI, after some time and with the proper sequence, on advertising. It’s not something to be afraid of, but it does require a bit of re-thinking some of the presuppositions you might have. We’d love to chat with you about how you can see a positive ROI with your advertising dollars.