7 sure-fire ways to demonstrate marketing ROI to your agency’s clients

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    Businesses spend a considerable chunk of their budgets on marketing campaigns, hoping to see results as soon as possible.

    Most use the marketing ROI their agency brings in to consider whether they will keep working with them. 

    This makes it your core responsibility as a marketing agency to keep your clients happy by ensuring they get value for their money, meaning proving your ROI.

    Overall ROI will give you the general amount of profit gained, but this is not enough to show Marketing ROI (MROI) at a granular level. You need to show evidence that every strategy you have convinced your client to invest in is working. This will help you develop projections that will guide budgeting for the rest of the campaign.

    Here are seven foolproof ways you can prove marketing ROI to your clients and strengthen your relationship:

    1. Set Your KPIs

    Most clients come with KPIs in mind, making it easier for you as a Project Manager to understand their goals and the results they are looking for. This allows for discussions on their best strategies and how to achieve them. However, not all clients will have KPIs, they expect you to come up with meaningful KPIs and educate them on what is a vanity metric versus an actionable metric

    Based on the project they hired you for and the client’s industry, you need to figure out the relevant set of KPIs: are they an online shop trying to reduce their customer acquisition cost with more organic conversions?

    customer acquisition dashboard

    Or are they a B2B company trying to feed the sales pipeline with better-quality marketing qualified leads?

    lead performance dashboard

    However, KPIs will not serve you as well as they should if you do not carry out constant KPI analysis. To help you achieve this, ClicData allows you to create a marketing KPI dashboard that allows you to get more insights from your performance analysis of each strategy. 

    For instance, if they hired you to run their social media strategy and campaigns, relevant KPIs will be:

    • Follower growth
    • Post impressions growth
    • Engagement rate growth
    • Reach growth
    • Mentions
    • Click-through rate (CTR)
    • Conversion rate (downloads, calls, demos, trials, contact requests…)

    You can measure the marketing ROI for each in ratios to determine the viability.

    2. Take Accountability For Your Client’s Budget

    No one wants to keep investing in money-bleeding marketing strategies. For this reason, you need to continually assess how much of your client’s budget is spent at every stage. 

    Every penny needs to be accounted for, so it is best to make a list that will help you look at every expenditure and determine its worth. The amount of revenue acquired or lost should guide you on the best strategies for specific campaigns. 

    You can also determine strategies that need more effort or those that need to be dropped entirely.

    3. Create An ROI Threshold

    Unrealistic client expectations are one of the leading causes of conflict between agencies and clients. The solution is setting an agreed marketing ROI limit in collaboration with your clients.

    An ROI threshold is typically expressed as a ratio because it is easier to understand, apply, and calculate. Though the best ratio varies for different sectors and cost structures, the recommended ratio is 5:1. A 5:1 ratio will cover both the manufacturing and marketing costs, which is the goal most companies are looking to achieve.  

    The ratio you and your client settle on will help you develop reasonable goals. However, to set yourself or your agency apart, ensure you surpass the goal. It will earn you a good reputation and more clients. 

    4. Calculate The CLV From Your Marketing Channel

    Customer Lifetime Value (CLV) is the value a business derives from maintaining a customer throughout their life. CLV will help you and your client identify the most profitable segments to keep pursuing.

    Most of the clients don’t track their CLV, so it is your responsibility to encourage it by showing repeat purchases’ impact on the revenue. For this, you need to separate the revenue from first-time purchases and repeat purchases. 

    You can use this formula to calculate your clients’ CLV:

    Customer Lifetime Value based on orders made = [(Avg. Monthly Transactions X Avg. Order Value) Avg. Gross Margin] x Avg. Lifespan in Months

    You will need to work collaboratively with your clients to generate and understand the figures because they vary depending on the sectors and customer journeys.

    5. Create An ROI Dashboard

    A marketing ROI dashboard helps you and your clients keep track of each campaign’s performance. It provides real-time insights into your conversion rate and profit gained over time for every account.

    Your clients will appreciate the option to check in on the campaign’s performance more than the occasional briefing. An ROI dashboard provides transparency, which most clients are looking for.

    If you want to create an easy-to-understand dashboard for your clients, check out ClicData’s dashboards. The dashboard helps connect, automate, prep, and visualize large volumes of data in the most interactive way possible.

    ecommerce ads performance dashboard
    Click here to open the live dashboard

    With this dashboard, you will be able to quickly identify the campaigns bringing your clients more prospects and revenue, which will inform future investments.

    6. Quickly Leverage Findings In Your Clients’ Campaigns

    For instance, if you are running Facebook ads, you need to prove they are worth the investment through their ROI. The ROI should be greater than your spending and the cost of human resources required. 

    Your client won’t be the only one who’ll benefit from your ROI calculations. Knowing your marketing ROI will also allow you to tell the strategies that you need to work on. Once you’ve identified opportunities for improvement, ensure your findings are implemented in your next campaigns. 

    However, if the campaign is running through your budget with no equal returns, it is time to modify your campaign. You can advise your clients to reallocate the budget for Facebook ads to channels that have a higher ROI. 

    Keep in mind that optimizing your campaigns is a continuous crucial process that retains and brings in more clients. Therefore, you will need to monitor, report and modify the marketing ROI you are offering to your clients. You can also analyze your competitors’ campaign strategies and take a few pages from their playbooks.

    7. Communicate Your ROI Often

    But guess what, having an ROI dashboard is still not enough for your clients. You need to take it to the next level to offer the best customer experience. Your clients will love being alerted when thresholds are met (good or bad news…) or getting a snapshot of their ROI dashboard in their inbox before they get their first cup of coffee.

    Offering this level of transparency and efficient communication with your client will surely tip the balance your way during agencies and partners evaluation.

    Turn Clients Into Long-Term Partners With Better ROI Communication

    You are responsible for proving that your clients’ investment in your services yields results by showing them your marketing ROI. You can prove your work’s worth to your clients by setting KPIs, knowing and tracking your clients’ costs, determining an ROI threshold, building a KPI dashboard, calculating your clients’ CLV, and analyzing the numbers. 

    Each of the steps discussed here will help you get closer to achieving your clients’ goals. If you assess your current campaigns and realize they are not working as they should, then it is your work to offer recommendations to your clients and modify your campaigns to yield better results.

    Remember, the only way to prove your work’s worth is to ensure your clients get value for their money. 

    About the author

    Jimmy Rodriguez is the VP of e-commerce for Shift4Shop, a completely free, enterprise-grade e-commerce solution. He’s dedicated to helping internet retailers succeed online by developing digital marketing strategies and optimized shopping experiences that drive conversions and improve business performance.