Immediate Marketing ROI’s Vs. Long Term ROI’s

We’ve all been there. You turn on your campaign, after one day it doesn’t generate you any leads and you feel like its not working. Wrong. These are the expectations we have when we want quick results from our marketing campaigns – it’s natural for us to want quick sales to invest back into our growing business.

Immediate results is also the best sign for immediate validation that the strategy your’e using is working. Quick purchases mean your’e reaching your target audience and converting them into sales.

The issue is, when we focus on only the immediate ROI of our campaigns – mainly through paid ads, we end up hurting our brand long term without realising. Returns from paid advertising can go as quick as they can come, factoring costs, competition, better products/services being offered or simply being outshone by a business who have more years of experience and are ever growing in online presence over the last 10 years.

Working in these small bursts of growth with paid campaigns makes it almost impossible to consistently scale your business as you are forced to start fresh with every new campaign you put out.

Its time to focus on how each of your campaigns perform in the long term, and how your brand improves over longer periods of time. Just like in finance the growth potential is greater when you consider long term steady investments.

While it’s fundamental to know how many sales come from a particular short term campaign, this mindset means you’re starting fresh with each campaign. You’re not looking at the impact of the campaign beyond when the ads stop running.

But in business there is no end, especially for a business looking to evolve and constantly grow. Even when a campaign is done, you still should be attracting clients and customers.

It’s easy to default to short term ROI because it makes it easier for entrepreneurs as well as marketers. You get to see results at face value over a short period of time – being able to quickly track and measure your ROI using analytics and measurement tools. Long-term ROI is harder to measure within short time frames, but it doesn’t need to be if you find the right metrics.

We can be too fixated on conversions os sales but in order to measure your long-term ROI, you want to look at outcomes over results. This can feel the same as results but outcome is more tangible.

Consider this example. Let’s say you run a marketing campaign that boosts your website traffic by 1,500 people. Of those 1,500 people, you land 10 new customers. The boost in website traffic would be your result, while the new customers would be an outcome.

However, there are different levels of outcomes within your campaign. While new customers is an outcome, it is still considered a short-term return on your marketing investment.

A longer-term outcome would be customer lifetime value.

Customer lifetime value is the total worth to a business of a customer over the period of their relationship. This metric is vital as it allows reduce costs to keep existing customers than it does to acquire new ones, hence increasing the value of your existing customers is a impactful way to drive growth outcome.

Focusing on customer lifetime value can also help direct your marketing strategy to focus more on converting repeat customers than just new customers.

Customers already familiar with your brand, can convert if not more than new customers, and on the plus side you are spending much less to get their attention and acquire more business.

As a business owner the main importance on focusing on long term ROI is understanding not to treat your business like a sprint, focusing on the need to sell right now and instead being aware of growth and treating your business like a marathon.

By investing in marketing campaigns that help boost your average customer lifetime value, you’re investing in long-term relationships with customers and clients who care about you. By building a strong brand with existing customers builds equity will be worth a lot when it comes time to exit.

Don’t just get caught up in just measuring your conversion rates and sales numbers. They are important to your business, especially when you’re just starting out, but long-term metrics paint a more important story, focusing on business growth and brand presence.

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