How Long Should I Wait To Receive A Return On Investment From Marketing?

Marketing is an investment for any business. Today we reach deep into my big old mailbag and whip out a question from Elizabeth Manso, owner of Brigade Bookkeeping. Elizabeth asks:

“How long should I wait until I receive a return on investment from my marketing?”

We answer this question in this episode of Four Minute Fixation. In fact, we answer a question from my mailbag every Friday.

Make sure you don’t miss out.   Subscribe using the links below.

Subscribe by email:

Subscribe by Email

Subscribe on YouTube:

Subscribe on YouTube

Here is the transcript from this episode:

How Long Should You Wait From A Return On Your Marketing Investment?

Hi again, everyone. Welcome to another edition of the Four Minute Fixation. Today it’s time for us to reach down deep into my big old mailbag and pull out another question. This week our question comes from Elizabeth Manso. She’s the owner and founder of Brigade Bookkeeping in Miami, Florida.

Elizabeth asks, “How long should I wait until I receive a return on investment from marketing?” Now Elizabeth, there’s a number of different ways to answer this question, but the way that I always answer return on investment questions about marketing is you don’t wait. You receive a return on investment from your marketing immediately, and you measure the return on investment on a case by case basis. Each marketing initiative should produce a positive return on investment or you don’t do it again. Let me give you an example.

Let’s say you’re using a direct mail campaign. Elizabeth owns a bookkeeping company. Let’s say she’s doing a direct mail campaign to business owners within a 50-mile radius of her office. She mails out 1,000 letters and each letter costs a dollar to send out. That’s $1,000 that she’s investing in that direct mail campaign. Now I know there are other costs, but for simplicity purposes we’re going to say it was $1,000.

She gets three responses back, and of those three responses from the thousand letters, she closes one deal. That deal produces $3,000 in new revenue, and that $3,000 comes in at a 50% profit margin, so she receives $1,500 in profit. She’s invested $1,000 and she’s received $1,500 in profit. She’s gotten a 50% return on her investment. She’s gotten a positive return on her investment. She should do that marketing campaign again.

Now, that’s how return on investment works for each marketing initiative. Every single thing you do from a marketing perspective should produce a return on investment. Now many of you may be wondering well what about branding. I was sold some advertising and the advertising person said the ad needs to run several dozen times in order to establish brand awareness and have the brand take a position in the mind of the client. That’s how branding works, but for small businesses, branding is complete and total BS. You’re not going to be able to invest in advertising for a long enough period of time to receive a positive return on your investment when you’re doing brand advertising or image advertising.

All the advertising you do as a business owner and entrepreneur needs to be what’s called direct response marketing, or direct response advertising, which means everything you do produces a return on investment, a positive return on investment anyone who wants to sell you image ads or brand-building ads, if you’re a small business and you don’t have hundreds of thousands or millions of dollars to spend on advertising, don’t do it, because you cannot produce a return on investment immediately from an image-building ad or from a brand-building ad.

Elizabeth, the direct answer to your question, how long should you wait to receive a return on investment from your marketing, you shouldn’t wait. Every marketing initiative you do should produce a positive return on investment. I’m Dave Lorenzo, and this week, every week, we’re fixated on your success. Here’s hoping you make a great living and live a great life.

Here are three other questions from our viewers:

How Do I Create Valuable Presentation Content?

When delivering a presentation you always wonder if you have created content that will engage all members of the audience. You also want to make sure you give the audience information they can use. This episode of Four Minute Fixation helps with both of those objectives.

How Do I Stay Motivated?

Do you wonder how to keep pushing forward toward achieving your goals? We address that issue in this episode of Four Minute Fixation.

How Do I Get Started Marketing My Business?

If you’ve never done any marketing in your business and you want to get started, you might wonder how to get going. This episode of Four Minute Fixation will point you in the right direction.