Question: I have been spending money marketing my clothing business on Facebook and Instagram using a freelancer marketer. What I am grappling with is quantifying the returns on the amounts I put in advs (sic) and in paying (the) freelancer. I feel like my sales - through refferals - outweigh anything I am getting from online leads - and the referrals cost me nothing in budgetary terms. How do I measure the returns of these online efforts?
George Muturi - Nairobi
Answer: Many thanks George for the question. ROI is a tricky subject to many but it ought not to be. First and foremost, it depends on what you consider a return. Return on investments always depends on what the return expected was. Unfortunately, everyone assumes ROI is sales which ultimately is not always correct. I say almost because the aim of any business at the end of the day is sales, but that is only at the very tail end of the day.
In marketing, there are many objectives. There is awareness, positioning, footfall, sales, trials and many more. When designing a campaign strategy, the objective set out should always be accompanied by a measurable metric. Like awareness should always be accompanied by reach numbers. App conversions should be accompanied by download targets and so on. These accompanying targets are your return on investment.
I would suggest you sit down with your marketer and go through the strategy you are currently using and agree what you need to spend money on, and what kind of return you would want. Further, you can try researching on the acquisition funnel in marketing to understand how the process of acquiring customers online goes. You can privately give us numbers on your budgets and your needs and we will be happy to give you estimated returns on your investment against the objectives you have.