Understanding a ‘good’ marketing Return on Investment (ROI) is crucial for Australian small and medium enterprises. It’s not a one-size-fits-all number. What’s considered excellent for a retail business will differ significantly from a professional services firm. We often see SMEs struggle with setting realistic expectations, leading to either underinvestment or frustration with perceived poor performance. Let’s break down some industry benchmarks to help you gauge your own results.
Generally, a marketing ROI of 5:1 is considered good – meaning for every dollar you spend, you generate five dollars in revenue. However, this is a broad guideline. Here’s a more nuanced view, keeping in mind these are averages and can fluctuate based on campaign specifics and economic conditions.
- Retail: Expect 6:1 to 10:1. Retail benefits from direct response marketing, promotions and seasonal campaigns. Strong customer data and loyalty programs can significantly boost these returns.
- Hospitality (Restaurants, Cafes, Hotels): 4:1 to 7:1. This sector is heavily reliant on local marketing, online reviews and social media engagement. ROI is often tied to occupancy rates or table turnover.
- Professional Services (Accountants, Lawyers, Consultants): 3:1 to 5:1. Lead generation is key here, and the sales cycle is typically longer. Content marketing, SEO and targeted LinkedIn campaigns are common strategies.
- Trades & Home Services (Plumbers, Electricians, Builders): 5:1 to 8:1. Local SEO, Google My Business optimisation and pay-per-click advertising are highly effective. Quick response times and positive online reputation are vital.
It’s important to remember that ROI calculations need to be accurate. Don’t just look at revenue; factor in all marketing costs – advertising spend, agency fees, software subscriptions, and even the internal time dedicated to marketing activities. We recommend using attribution modelling to understand which touchpoints are contributing most to conversions. As we move into 2026, expect increased scrutiny on data privacy and a greater emphasis on first-party data collection, which will impact attribution accuracy.
Ultimately, a good marketing ROI isn’t just about hitting a number. It’s about consistently improving your results and making data-driven decisions. If you’re unsure where to start, or your ROI is consistently below these benchmarks, we suggest conducting a comprehensive marketing audit to identify areas for optimisation. A clear understanding of your customer acquisition cost and lifetime value will also provide valuable context.
