Businesses that don’t Investing in your future may not have a future to look forward to.
Whether you’re investing in your human resources or critical technology, some short-term outlay is always needed for long-term success. That’s also true when it comes to marketing – you can’t market your product or service without investing in advertising. But if that investment doesn’t translate into leads and conversions, you’re in trouble.
A “good” ROAS score is different for each company and campaign. If your figure is not where you would like it to be, you can leverage ROAS data to create targeted campaigns and personalized experiences.
Identifying and applying the most appropriate metrics based on business goals is vital, and there is no one best practice or one-size-fits-all approach.
However, smart use of ROAS data can triple lead generation, as I discovered when I joined Brightpearl to restructure marketing campaigns. Let’s take a look at some of the ways Brightpearl used ROAS to improve campaigns and increase lead generation. The key is figuring out what a healthy ROAS represents for your business so you can optimize accordingly.
Use the correct return metric
Choosing the correct return metric is critical to calculating your ROAS. This will depend in part on your sales cycle.
Brightpearl has a long sales cycle. On average it’s two to three months and sometimes up to six months, which means we don’t have tons of monthly data if we want to use new customer revenue data as a return metric. A company with a shorter sales cycle could take advantage of the revenue, but that does not help us optimize our campaigns.
Instead, we choose to use the Accepted Sales Opportunity (SAO) value. It usually takes us about a month to measure, so we can get more ROAS data at the same time. It’s the last stage of sales before a win, and it’s more in line with our company’s goal (to increase our annual recurring revenue), but it takes less time to collect the data.
At the SAO stage, we know which leads are of good quality – they have the budget, they are adequate, and our software can meet their requirements. We can use them to measure the performance of our campaign.
When choosing a return metric, you need to make sure it matches your business goal without taking years to get the data. It also has to be measurable at the campaign level, because the goal of using ROAS or other metrics is to optimize your campaigns.
Accept that less is more
I have found that many companies are afraid of missing out on opportunities, leading them to advertise on all available channels instead of concentrating resources in the most profitable areas.
Potential customers often research across channels, so you can try to cover all possible touch points. In theory, this could lead to more leads, but only if you had an unlimited marketing budget and human resources.