The Marketing Methods For Small Businesses With The Best Return On Investment

This article is a review of real results, from real marketing initiatives of real businesses. It is a summary of results from all of Profitworks' customers and gives a very good indication of what is working for small businesses to generate new customers. The report includes exact ROI numbers for each type of marketing used, which I think you will find very helpful for determining where you will spend your marketing dollars in the coming year. The data spans an entire year and includes many different activities, so I think it is a good sample of data to make conclusions from. Read this article to find out what we found out were the most profitable marketing methods.


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What Marketing Methods Have The Best Return On Investment

Marketing Method ROI (One Year Of Sales)

Marketing Method ROI

Of the marketing methods used by Profitworks' customers the best method was by far cross selling. This included either cross selling additional products or services to existing customers or entering into cross promoting agreements with other businesses. This makes complete sense to me because you are already dealing with a person who is highly targeted and in the frame of mind of purchasing. In addition you are talking with someone who has already made the decision to purchase, which is the hardest part of the selling process. RFPs or Request For Proposals also had a high return on investment. RFPs take a lot of time so I included the time spent on them at a rate of $40.00 per hour. If you could find someone to write them for less than this amount your return on investment would increase even more. RFPs have such a high return on investment because they are usually very large orders and the cost to complete them is very low, just time and a few dollars to print them if they require hard copy submissions. In addition many RFPs only have a few companies that properly submit the RFP so you may be starting at a 20-25% chance of winning the order before even taking into account the strength of your proposal. After that the best marketing methods are by far a website/blog and email marketing. After that the ROI from the various marketing methods falls off dramatically. Next year I am going to try and split data on a website and blogging to show how both are important. Linkedin ads and direct mail letters had terrible ROIs at -100% and I would not recommend these marketing methods to anyone. I think there are many reasons Linkedin Advertising is not effective. To read more check out my article Linkedin Advertising Does Not Work. Direct mail post cards did post a negative ROI but as you will see they can be very positive as well if executed correctly and with the correct target segment. In the charts below you will see that the some customers were able to get a positive ROI from direct mail post cards and when you look at them over a 3 year period (assuming sales you generate are recurring for at least 3 years) the aggregate results showed a positive return on investment as well.

Note: The ROIs are calculated based on the assumptions that sales have a 40% contribution margin. ROI is calculated as contribution margin less marketing method costs, divided by marketing method costs.

If you are finding this article helpful please go to my Linkedin profile and endorse me for the skill "Sales & Marketing ROI". If are are able to do this it would be a big help.

Learn More About The Measured Marketing Method


Marketing Method Return On Investment Range (Minimum, Maximum, Average)

Marketing Method Minimum, Maximum, Average

In this next graph we show the range of return on investment percentages by each method. The top of the bar is the highest ROI experience by any one company while the lowest point on the bar is the lowest ROI for that marketing method. The box is the average ROI. I think the graph is self explanatory but some of the data is hard to read because of the scale. The data that you can't see very well from the chart is that Google adwords span from 512% to -100% Direct Mail spans from 207% to -100%. Linkedin and direct mail letters the maximium, minimum and average are the same at -100%.


Marketing Method Return On Investment (3 Years Of Sales)

3 year marketing method ROI

As you can see the return on investment changes when you include 3 years of recurring sales. You will note that the RFP metric has not changed as usually when you win an RFP you are awarded the contract for multiple years so the sales you have confirmed does not increase over 3 years. In the particular example from the data, all RFPs won were a one time project that did not have recurring revenue and would not be needed again within the 3 year time frame. Of special note is how when you look at 3 years of recurring revenue direct mail post cards also become a positive ROI marketing method that is worth pursuing.

In summary, there are many marketing methods a business should be able to use to obtain new customers and grow its sales. The return on investment on many different mediums is excellent. For example based on the data email marketing will deliver $16.82 in profit for ever dollar spent if you assume sales over one year or $52.46 in profit for ever dollar spent if you assume sales recur for 3 years. If marketing is done well I think this data is proof there can be a very good return on investment. In almost all cases utilizing cross selling, RFPs, a website, email, telephone marketing and google adwords in your marketing effort will be an excellent idea. The results you achieve will come down to how well you execute each initiative but you will have a higher likely hood of success if you choose these marketing methods.  On the other hand avoid Linkedin Ads or direct mail letters. If you use these chances are you will end up with empty holes in your pockets.

Instead of just picking the top ROI marketing methods though to promote your business I would always recommend completing a proper marketing plan. If you have never completed one before you can get a free marketing plan for your business now from our website that will walk you step by step through everything you need to do do write your own marketing plan. If you don't have time or feel you are not qualified to write your marketing plan feel free to contact us and we would be happy to help you write one.


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My name is . I work at Profitworks Small Business Services helping various B2B small businesses in Waterloo and Kitchener Ontario generate new customers. Feel free to connect with me on or if you are just interested in getting new customers for your B2B small businesses enter your email in the box provided below and click the "Send Me Free Marketing Insights" button.


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Other Articles You Might Be Interested In

1. Why Having A Website Is Important

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3. Where RIM's Blackberry Mobile Fusion For Small Business Went Wrong

4. Good Marketing Questions To Ask For Explosive Sales And Profits

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