Friday, September 30, 2022
HomeArticlesB2B marketingHow to optimize marketing return on investment (ROI) in 2022

How to optimize marketing return on investment (ROI) in 2022


Top Sources for B2B Leads 2021

From processors to wholesale distributors, B2B companies engage in numerous marketing activities to generate sales leads for their products and services. A recent B2B study revealed that the top sources for sales and marketing leads from 2019 to 2021 were:

  • Referrals – 73% (2019) to 65% (2021)
  • Tradeshows and Events – 46% (2019) to 30% (2021)
  • Email Marketing – 33% (2019) to 38% (2021)
  • Website Search Engine Optimization (SEO) – 28% (2019) to 33% (2021)
  • Social Media – 24% (2019) to 33% (2021)
  • Website Search Engine Marketing – 19% (2019) to 21% (2021)
  • Other (cold calls, traveling sales, etc.) – 9% (2019) to 13% (2021)
  • Print Advertising – 8% (2019) to 8% (2021)
  • Public Relations – 7% (2019) to 17% (2021)
  • Telemarketing – 6% (2019) to 6% (2021)
  • Direct Mail – 4% (2019) to 5% (2021)

The takeaway for B2B companies, such as the ones in the seafood supply chain, is that global events like COVID-19 are changing the way suppliers and service providers engage with their buyers. Sales leads obtained from online marketing channels are growing, while leads from traditional channels like tradeshows and events are declining by as much as 16%. To determine which marketing activities are performing the best, it’s important to compare the costs and benefits of your investment.

Return on Investment (ROI) – How do you figure out which marketing activity is making the best use of your investment in both time and money?

Figuring out which B2B marketing channel is the best starts with establishing a baseline to compare each activity. Return on Investment (ROI) is a measure of calculating how much of a return, or profit, you are making in comparison to your investment. The formula is as follows:

ROI = (Return – Investment) / Investment

ROI = (Return – Investment) / Investment 

The formula calculates how much money you make after subtracting the cost of your investment, and then dividing by the cost of your investment in order to get a ratio. ROI is often multiplied by 100% to get a rate so it is easier to understand.

Calculating ROI

Return refers to the value of your sales generated by a specific marketing activity, while investment refers to the cost of your time and expenses. So if you paid $4500 for online ads and spent 10 hours setting up the ad campaign with an hourly rate of $50, the cost of your investment is $5000 ($4500 + $50 x 10 hours). 

Let’s say the campaign brought you a total of 45 sales with an average transaction value of $5000. That’s $225,000 in revenue, which translates to $45,000 in profit (return) if your gross margin is 20%.

The calculation for ROI is as follows:

ROI = ($45,000 – $5000) / ($5000)

ROI = 8

You can multiply ROI by 100% to get a percentage, which means that in this scenario there has been a 800% (8 x 100%) return on an investment of $5000. The calculation for ROI can become increasingly more complicated once you start factoring other variables into your estimates for profit (return) and investment.

Comparing Different Marketing Activities Using ROI

The following example can be used to guide your calculation, however your actual variables for investment and revenue will likely be different.

Tradeshows and Events

For Tradeshows and Events, it’s important to factor in the full cost of attendance and the overhead associated with preparing for the event all the way to making the sale.

Investment

Sample calculation assuming you have a a team of 5 people and one booth:

Display – design and creation (~$1500)

Print Ads – sales brochures, business cards, handouts, etc. (~$1000)

Overhead – employee wages for planning, preparation,  etc. (~$2500)

Event – tickets for admission, booth, after hour parties (~$5000)

Event Overhead – employee wages, travel, accommodations, per diem (daily allowances), etc. (~$6000)

Sales Overhead – employee wages to qualify, sell, follow up, and close sales with leads, etc. ($2500)

Total: ~$18,500

Revenue

If you obtain 20 good sales leads, and end up making 5 sales with an average price of $10,000. That’s $50,000 of sales.

ROI: ($50,000 – $18,500) / $18,500 x 100%

ROI = 170%

Comparison

By calculating ROIs for different marketing and sales generating activities, we can compare different ROIs to see which activities are making the most efficient use of your marketing investment. In the two previous example calculations, we have a ROI of 800% for online ads, and a ROI of 170% for tradeshows and events. This means that you’re looking at an 8 times return on your investment as opposed to 1.7 times. Another way to think about it is that if you put $1.00 into online ads, you can expect to get $8.00 back, versus $1.00 into a tradeshow which will give you $1.70 back.

Need professional help?

If you’re ready to talk to someone, contact our team that specializes in digital marketing for B2B seafood supply chain companies.

Trademodo - Paul Panhttps://trademodo.com/about/
For editorial suggestions, feedback and general inquiries - info@trademodo.com. For media sponsorships, digital marketing and leads - sales@trademodo.com. For the latest content subscribe to our newsletter and follow us on social media.
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Featured

Most Popular

Media

News, guides, rankings, reviews, case studies, research, trends and more.

B2B digital marketing

Web development, digital ads, content marketing, lead generation, and more.

Lead generation

Qualified lead lists, email marketing, events, webinars, and more.

Interactive directory

Business profiles with areas of focus, contact info, media, reviews, and more.