How to Improve your ROMI (Return on Marketing Investment)

The return on marketing investment. Maybe you've heard someone in the accounting department whisper it to your boss behind your back. It's the deciding factor of a great marketing campaign and whether or not you get to keep that cubicle. The good news is that learning how to improve your ROMI will save your overall ROI and justify your future marketing expenses.

The Definition of Return on Marketing Investment

Your marketing ROI is defined differently than your typical ROI. ROMI measures a specific marketing objective (traffic, sales, customer retention) in the short or long-term and determines if it's a worthwhile investment.

Now that the wordy stuff is out of the way we can get to the fun part. Analyzing your ROMI makes you more effective in future marketing decisions - helping you transform those risky moves into strategic marketing missile strikes of conversion (we'll cover that in a second).

If you aren't measuring the effectiveness of your marketing campaigns then you're gambling with your budget, career, and those precious conversions. In order to end your gambling addiction you first need to understand the ROMI formula.

Return on Marketing Investment Formula  

Or, how to stop gambling with your marketing budget

Or, how to stop gambling with your marketing budget

(Sales Growth - Marketing Cost) / Marketing Cost = ROMI

Here's a simple formula you'd use if your campaign objective was sales revenue. If you wanted to measure the value of conversions (such as people signing up for your mailing list) or the lifetime value of retaining one customer (how much profit one customer will bring in their average lifetime), you'd plug in those factors instead of sales growth.

Measuring the effectiveness of a campaign versus it's costs separates real marketing strategy from throwing your budget in the air and praying. Your gamble becomes a safe bet.

What if you could tip the odds in your favor even further? What if your safe bet became that surgical missile strike we mentioned earlier? Buckle up, we're about to improve your ROMI even further with two secret marketing techniques:

Positioning and Targeting. 

Maybe they aren't secrets, but they're definitely two underutilized strategies. Positioning makes your marketing valuable, targeting focuses on the market that values it. Both revolve around making the relationship between your brand and your customer mutually beneficial.

Think of positioning and targeting like a dance (forget that missile strike metaphor from earlier, too violent). Dancing is less risky than gambling and a lot more fun, as long as you don't step on your partner's toes. The key to good dancing is understanding your partner (AKA your market).

  • Who are your customers?
  • Why do they value your business?
  • What role do you play in their lives?
  • Where do you find them?
  • How do they see themselves?

This research helps you narrow down a definition for your ideal customer, your perfect dance partner. The success of your positioning and targeting depend on accuracy of your research. Update your market research often.

We live and operate in a consumer culture. That means your market holds the power, and they're constantly evolving. It's your responsibility to understand the fluctuations in your market's preferences.

That means stay up to date on new technology, media, and trends. Understand how cultural changes relate to your business and take advantage of that in your marketing strategies.

Which brings us to the first half of our ROMI improvement strategy:


Positioning is a branding strategy. It applies in every interaction you'll have with your customer; including site design, advertising, email marketing, pricing - it's your identity from your market's perspective.

Think of it this way - positioning is how your consumer will associate your business. If you speak their language, solve their problems, and fit their culture you'll earn their trust and appeal to their identity. Becoming a brand people want to associate with is, obviously, incredibly beneficial.

That's easier said than done, but understanding your market gives you enormous insight into what they value about your business. Appealing to that value in your positioning will increase your market's engagement with your marketing. 

Are you trendy, convenient, affordable? Are you providing them a superior lifestyle? Does your product signify high social status? If you're selling a commodity you can still use a little creativity to infuse value into your brand.

Here's a great example of positioning:

Dollar Shave Club, a razor blade subscription service, does a great job differentiating themselves and grabbing the attention of their target market. Compare their website to their competitor,

The difference? Dollar Shave Club isn't afraid of incorporating personality into their positioning. Their advertisement went viral and now the company is a hit with a very lucrative market - young males who appreciate humor and need to shave.

Positioning isn't for your benefit. Your market doesn't care how cool you are or how long you've been in business unless it affects them. Stay focused on your market and they'll stay focused on you.

Which brings us to the second part of our strategy:


Targeting is when you apply the magic. You know the moves your market values and you're ready to sweep them off their feet. It's time to connect with your target market.

Now that you understand your consumer you know where to find them. Are they Facebook junkies? Twitter fanatics? Are they searching Google for a problem that your product solves? Invest your marketing efforts into whatever channels they frequent.

Be as specific as possible when targeting your market. Demographics, psychographics, behavioral characteristics - it all works together in engaging your market. After all, these are the people who need you most.

Your research will also help you decide how you should reach your market. Maybe they don't trust ads and would prefer content offering (your) solutions to their problems. 

Targeting qualified prospects will increase your conversion rate. Positioning your brand to align with their values will create engaged consumers. Consistency in your marketing fuels the funnel. 

Let's use Google's PPC advertising system as an example. It allows you to target by:

  • Keyword - these are the search terms your market is using. The keywords you use for your ad will relate to your business, positioning, and needs of your market.
  • Location - where is your target market? Are you a global service? A local business? Having a geographic understanding of your market is essential for profit and cost reduction. 
  • Device - is your market using a phone? laptop? tablet? library PC?
  • Audience - AKA your market. This metric (along with proper keyword research) will impact your ROMI the most. Understanding the age, gender, interests, and behavior of your market is the difference between a qualified lead and a waste of a click.  

Each of those variables brings you closer or further from your target market. If your targeting is spot-on your ad will grab the attention and interest of your prospect. They'll click through to a landing page positioned with their values in mind. You'll discuss their problems in a way that makes them desire your solution (this is where professional copywriting is essential). You've become more than another dry brand staring at their wallet, you're a partner they appreciate.