Many people wonder if through digital marketing we can verify if sales have been generated and the answer is that if in a marketing plan, online or offline, goals are set and certain indicators are worked on, we can monitor and measure the results obtained, to find out if they are achieved and/or to analyze if they are effective for the food business.
Now, have you ever wondered how to measure the success of your marketing campaign? There are several formulas that will guide you and verify if your investment is generating sales.
1.- Return on Investment (ROI): This formula measures the return on your investment in marketing in relation to the cost of investment. Example: If you invested $1,000 in an ad campaign and generated $1,500 in additional revenue, your ROI would be 50%.
It is important to determine SMART goals with a budget for a monthly advertising campaign and monitor how this indicator is going.
2.- Cost per Acquisition (CPA): This formula measures the cost of acquiring a new customer through marketing. Example: If one of your monthly SMART goals was a discount coupon campaign and you invested $500 and acquired 20 new customers, your CPA would be $25 per customer as a result.
3.- Customer Lifetime Value (CLV): This formula measures the total value that a customer generates for your business throughout his life. Example: if an average customer spends $50 in your business; every time they visit your restaurant (estimated once a month for the next 5 years) their CLV would be $3000. With this indicator we project to the following years and we focus on generating loyalty campaigns so that they continue visiting the restaurant in the long term.
4.- Conversion Rate: This is a formula that measures the effectiveness of a marketing campaign in terms of the proportion of website visitors who make a purchase. Example: if your business has a website where you can make reservations and you have 100 visitors, and 20 of them made a reservation and consumed, your conversion rate would be 20%.
As you can see there are several formulas that can help you measure whether a marketing campaign is successful. Therefore, it is important to take into account other factors such as customer satisfaction, loyalty and recommendation, since they are also important for the long-term success of a food business.
We co-created this content with Valentina Salazar (@valentinasalazarmx), Food Marketing Consultant, to help your business grow.