The ROI Treatment

Get better results by creating an ROI model.
Magazine Contributor
3 min read

This story appears in the November 2003 issue of Entrepreneur. Subscribe »

Do you market your on the Net? Stop! Before you invest more time or money, develop an ROI model based on these five steps to achieve greater success:

1. Research market demand. How do people search for your business online? Choose keywords that describe your products or services. Then check the popularity of these keywords by using Overture's Search Term Suggestion Tool or WordTracker. You'll see what related offers you could sell and which words to use in your to relate to your audience better.

2. Write marketing copy that sells. Bryan Eisenberg, author of Persuasive Online Copywriting (Wizard Academy Press) and principal of Future Now Inc., a marketing firm, reminds marketers to use "copy vs. images." Pay attention to how you express value, what mood you set, if your policies instill trust, and whether you're style or substance. From your e-mail or banner ad campaigns to the landing pages you send consumers to, address the needs of your target markets.

3. Optimize your . What colors persuade site visitors to buy? Does a free shipping incentive convert better? Page layout,colors, graphics and words all affect conversion rates, so find the combinations that yield the best results.

4. Use a conversion formula to evaluate profitability. Many factors influence marketing performance. Fortunately, all you need to forecast results is some basic data: a customer acquisition cost goal, site conversion data and the program cost.

Say you're willing to spend $10 to land a new customer, your site conversion rate is 2 percent, and you could buy 1,000 clicks for $250. This campaign won't work; you'll actually end up paying $12.50 per customer. (Two percent of 1,000 clicks is 20 customers. The program cost of $250, divided by 20 customers, is $12.50 each.) This formula for a cost-per-click campaign is an example of how to determine the profitability of a campaign before investing in it.

5. Test before you invest. Execute a small campaign and track the results. Dan Roitman, founder of Internet Order LLC, a marketing firm in Pittsburgh, used Future Now's conversion methodology to create his marketing model. He also used WebTrends), which provides Web and traffic analysis, and Inceptor, which provides a search engine and marketing and optimization services, to test landing pages before launching a marketing campaign. Over five weeks, Internet Order's conversion rate for its foreign language course increased by more than 1,500 percent. Roitman, 25, credits ROI model development and testing as chief contributors to his marketing success.

Don't wait until your budget is exhausted to determine your e-marketing ROI. You can create a performance model to assess profitability before and during your campaigns.

Speaker and freelance writer Catherine Seda owns an agency and is author of Search Engine Advertising.


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