Businesses that don’t invest in their future may not have a future to look forward to.
Whether you’re investing in your human resources or in critical tech, some outlay in the short term is always needed for long-term success. That’s true when it comes to marketing as well — you can’t market your product or service without investing in advertising. But if that investment isn’t turning into leads and conversions, you’re in trouble.
A “good” ROAS score is different for each company and campaign. If your figure isn’t where you’d like it to be, you can leverage ROAS data to create targeted campaigns and personalized experiences.
It’s vital to identify and apply the most suitable metrics based on business goals, and there’s no one best practice or one-size-fits-all method.
However, smart use of the return on advertising spend (ROAS) data can triple lead generation, as I discovered when I joined Brightpearl to restructure the 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 to work out what represents a healthy ROAS for your business so that you can optimize accordingly.
Use the right return metric
It is paramount to choose the right return metric to calculate your ROAS. This will depend partly on your sales cycle.
Brightpearl has a lengthy sales cycle. On average it’s two to three months, and sometimes up to six months, meaning we don’t have tons of data on a monthly basis if we want to use new customer’s revenue data as the return metric. A company with a shorter sales cycle could use revenue, but that doesn’t help us to optimize our campaigns.
We chose to use the sales accepted opportunity (SAO) value instead. It usually takes us about a month to measure, so we can get more ROAS data at the same time. It’s the last sales stage before a win, and it’s more in line with our company goal (to grow our recurring annual revenue), but takes less time to gather the data.
By the SAO stage, we know which leads are good quality — they have the budget, are a good fit, and our software can meet their requirements. We can use them to measure our campaign performance.
When you choose a return metric, you need to make sure it matches your company goal without taking ages to get the data. It also has to be measurable at the campaign level, because the aim of using ROAS or other metrics is to optimize your campaigns.
Accept that less is more
I’ve noticed that many companies harbor a fear of missing out on opportunities, which leads them to advertise on all available channels instead of concentrating resources on the most profitable areas.
Prospects usually do their research on multiple channels, so you might try to cover all the possible touch points. In theory, this could generate more leads, but only if you had an unlimited marketing budget and human resources.