Many Australian SMEs struggle to connect marketing spend to actual business growth. It’s not enough to simply track website visits or social media likes. We need to establish clear Return on Investment (ROI) targets that directly contribute to your overall business objectives. This isn’t about squeezing every last cent, it’s about intelligent investment and predictable results.

The first step is understanding that marketing ROI isn’t a single number. It’s a series of interconnected metrics. We recommend focusing on a tiered approach, linking marketing activities to revenue, not just leads. Think about it like this: what’s the ultimate goal? More sales? Increased customer lifetime value? Brand awareness that translates to market share? Your targets need to reflect these.

Here are a few key insights to help you set realistic and impactful ROI targets:

• Baseline Measurement: Before launching any new campaign, thoroughly analyse your current performance. What’s your average customer acquisition cost (CAC)? What’s the average order value (AOV)? What’s your current conversion rate? These are your starting points.
• Channel-Specific ROI: Don’t treat all marketing channels the same. Google Ads will have a different ROI profile than content marketing or email campaigns. Set individual targets for each channel based on its purpose and cost.
• Customer Lifetime Value (CLTV): This is crucial. A campaign might have a seemingly low initial ROI, but if it attracts customers with high CLTV, it’s a win. Factor CLTV into your calculations to get a more accurate picture.
• Incremental Growth Targets: Instead of aiming for a huge jump in ROI overnight, set incremental targets. For example, aim to increase ROI by 10% each quarter. This is more achievable and allows for continuous optimisation.

Remember, ROI isn’t static. Regularly review your targets and adjust them based on performance and changing market conditions. We also suggest using attribution modelling to understand which touchpoints are most influential in the customer journey. This allows you to refine your strategy and allocate resources more effectively.

Ultimately, setting effective marketing ROI targets is about aligning your marketing efforts with your broader business goals. By focusing on revenue, CLTV, and incremental growth, you can ensure your marketing investment delivers sustainable and profitable results. Your next step should be a comprehensive audit of your current marketing activities and a clear definition of your key business objectives.