How Do You Improve ROI in Digital Marketing?

What Are the Best Ways to Increase Marketing ROI?

The best ways to increase marketing ROI change one of its inputs: what each customer is worth, how many of the people you pay to reach become customers, what the ad platforms are trying to find, and how much spend reaches anyone who could buy. Start from an ROI rebuilt from your own sales records, since a dashboard figure can rise while the business wins nothing extra.

1. Rebuild last quarter’s ROI for each channel from your CRM, on gross profit and signed customers, as how to measure digital marketing ROI explains.
2. Split each figure by type of customer and by what they bought, since an average blends buyers worth widely different amounts.
3. Find the stage where most of the people you paid for drop out, and fix the cheapest leak first, which in the accounts we review is usually reply speed or the page paid traffic lands on.
4. Change what the ad platforms count as a conversion, so their bidding goes after qualified leads and sales.
5. Remove spend that never produces customers, such as searches and audiences that don’t match your buyer.
6. Only then change the budget, judging any increase or cut by the profit it adds or removes rather than the ROI percentage.

The Channel Selection step of ProfitPaths®, 5K’s method, shows how to set up the source of truth this list depends on.

The levers on digital marketing ROI, and where each one is covered

How Can You Improve Marketing ROI Without Spending More?

You can improve marketing ROI without spending more by raising what each customer is worth and by converting more of the visitors you already pay for, since both lift the return while the cost stays put. In the accounts we review, the return side gets the least attention, because ad dashboards say nothing about which customers were worth winning.

• Point the spend at the offering that earns the most per customer, because ads tend to sell whatever is easiest to sell, often the offering with the thinnest margin, which the IMPACT Offering step shows how to check.
• Aim at the buyers who pay the best margin and stay the longest, since the same product can be worth many times more to one type of buyer than another, which the IMPACT Prospect step shows with three types of buyer.
• Count follow-on sales in the return once you’ve measured how many customers go on to buy more, and how to increase customer lifetime value covers raising it.
• Turn poor fits away before they click, since in our own campaigns putting the starting price in the ad cut clicks from buyers who could never afford it.

In the accounts we review, the largest gain that needs no new spend comes after the click, in a page built for the buyer who clicked, a specific offer and a same-day reply, which the Prospect-to-Lead Conversion step covers and how to reduce customer acquisition cost shows on an unchanged budget.

What Do You Do to Improve ROI in Google PPC?

To improve ROI in Google PPC, change what Google counts and values before you touch bids or budgets, because its automated bidding chases whatever you’ve told it a conversion is. Then remove the searches that never turn into customers, and set any return target from your margin.

Google says primary conversion actions are reported in the “Conversions” column and used for bidding, while secondary actions are for observation only,¹ so if a brochure download and a qualified lead are both primary, the bidding treats them alike. Google Ads also has goals for leads qualified later in your CRM and for leads that reach a step such as a closed sale.² The order we work in:

1. Make a qualified lead or a sale the primary conversion, using the best conversion actions to set in Google Ads and setting conversion value in Google Ads to profit.
2. Read the search terms report sorted by cost, adding terms that aren’t relevant to what you offer as negative keywords, as Google suggests.³ How to do a PPC audit covers the rest of the account.
3. Set any target return from your break-even point. Google notes that a target ROAS set too high may limit the traffic your ads get, and suggests gradually lowering it to increase conversion volume,⁴ so a higher target can buy a better ratio on fewer customers. How to calculate break-even ROAS shows where the floor sits.
4. Give each change time before you judge it. Google says Smart Bidding typically converges on a new goal within 1 to 2 conversion cycles,⁵ so a business whose leads take a month to close waits longer than one whose buyers order the same day. How much to spend while you make these changes is covered in how much you should spend on Google Ads.

Can Cutting Ad Spend Improve Marketing ROI?

Cutting ad spend usually raises the ROI percentage, because the first dollars in a channel win the easiest customers and the last dollars the hardest, but it can lower the profit the business keeps. Cut where the added customers cost more than they’re worth, and keep spending where they still earn more than they cost.

Tim Ambler and John Roberts of London Business School made this argument in a 2006 Marketing Science Institute report: because returns diminish, “the point of maximum ROI is reached before the point of maximum profit,” and across a range of spending total profit keeps rising while ROI falls.⁶ That’s reasoning rather than a measurement, and the running example on this site shows it in a budget decision.

A report that rewarded the highest ROI would have held LinkedIn at its first level and given up more than half the profit it went on to make. Cutting improves both the ratio and the profit in three situations:

• When the added customers cost more than you can afford to spend to win one, found by dividing each step of extra spend by the extra customers it brought, as the Marketing Action Plan shows.
• When the spend wins no customers at all, which how you can cut costs in a marketing budget helps you find.
• When you can’t deliver the extra customers well, as the contractor found in the Marketing Action Plan’s limits section, where its service team set the pace.

How Do You Track ROI to Improve the Next Campaign?

Track ROI to improve the next campaign by changing one lever at a time, keeping the original running beside the change, and reading the result in your CRM after a full sales cycle, because a quarter in which the page, the offer, the bidding and the budget all changed can show ROI rising without telling you what to repeat.

1. Write down the starting point, spend, customers and gross profit by channel for the last full sales cycle, then pick one lever from the table above and one change to it.
2. Duplicate the original rather than editing it, so the control keeps running, since in our own campaigns changing several things at once made the results impossible to interpret.
3. Wait at least one full sales cycle, and longer after a bidding change, then read qualified leads, sales and gross profit in the CRM rather than the platform’s conversion count.
4. Keep the change or roll it back, then move to the next lever, recording what you did so next year’s plan starts from evidence.

If you run a smaller business, a spreadsheet of every lead’s source, outcome and value is enough. If you lead marketing at a larger company, agree the definition of ROI with finance before the first change, so an improvement isn’t later explained away as a change in method, and what is a good marketing ROI covers the minimum each channel has to clear.