Understanding Your Forecasted Marketing ROI
This calculator is designed to give you a forward-looking estimate of the potential return on your current marketing investments. By inputting a few key figures, you can get a valuable snapshot of what your efforts might yield. Remember, this is a forecast, and its accuracy improves with the quality of your input data.
Total Marketing Spend ($)
Enter the total amount you’ve invested (or plan to invest) in your marketing campaigns for the specific period you’re analyzing (e.g., for the current month). This should include all relevant costs like ad spend, content creation, agency fees, etc.
Example: $2500.00
MQLs Generated Generated (#)
Input the total number of Marketing Qualified Leads (MQLs) you’ve generated (or expect to generate) from these marketing efforts during the same period.
Example: 150
Est. MQL-to-Customer Closing Rate (%)
This is a crucial input. Enter your estimated percentage of MQLs that eventually convert into paying customers.
Example: If 5 out of every 100 MQLs become customers, enter 5.
Est. Avg. Revenue per Customer ($)
Enter the average amount of revenue a new customer typically generates for your business from their initial purchase or over a defined period relevant to your contracts/invoices.
Example: $2000.00
Understanding Your Results
- Projected ROI (%): This is the main output, showing your estimated Return on Investment as a percentage. A positive percentage means your projected revenue exceeds your spend.
- Projected Revenue ($): An estimate of the total revenue your MQLs from this period might generate, based on your closing rate and average revenue per customer.
- Projected Profit ($): The difference between your Projected Revenue and your Total Marketing Spend for this period.
This rate is vital for an accurate forecast. If you don’t have this number readily available, here’s how to approach it:
Ideal Method (Using Historical Data)
- Define a Lookback Period: Choose a significant period in the past that represents a typical sales cycle length or longer (e.g., the last 6, 12, or even 18 months). The longer the period and the more data you have, the more reliable your rate will be.
- Identify MQLs from that Period: Count all the leads that were qualified as MQLs during your chosen lookback period. For example, all MQLs generated between January 1st and December 31st of last year.
- Track Those Specific MQLs to Closure: Now, follow that specific group of MQLs and see how many of them have converted into paying customers to date, regardless of when they actually closed. (An MQL from January might close in June – that's fine, it still counts for the January MQL cohort's success).
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Calculate the Rate:
MQL-to-Customer Closing Rate (%) = (Total Customers Converted from that MQL Cohort / Total MQLs in that Cohort) * 100
Example: If you generated 500 MQLs last year, and to date, 25 of those specific MQLs have become customers, your rate is (25 / 500) * 100 = 5%.
If Historical Data is Limited or Unclear
- Start Tracking Now: The most important step is to begin meticulously tracking this from today onwards. Ensure your CRM or sales tracking system clearly identifies when a lead becomes an MQL and when a deal (linked to that MQL) closes.
- Work with Your Sales Team for an Educated Estimate: Discuss with your sales team. Based on their experience, for every 10 MQLs marketing passes over, how many typically end up closing, even if it takes time?
- Use Conservative Estimates: If you're unsure, it's generally better to start with a conservative (lower) closing rate for your forecast. You can always adjust it as you gather more data.
Key Tip: Regularly review and update your estimated closing rate as you gather more actual data. The more accurate this input, the more reliable your Forecasted ROI will be.
While this calculator provides a projection, it’s a valuable tool for:
- Gauging Potential: Understand the potential financial impact of your current marketing efforts.
- Budgeting & Planning: Help make informed decisions about future marketing spend.
- Setting Targets: Provide a baseline to compare against your actual results as they come in.
- Identifying Levers: See how changes in spend, MQL volume, closing rate, or average customer value can impact your potential ROI.
This forecasted ROI is your leading indicator. Combine it with tracking your actual ROI over time (as deals close from these MQLs) for a complete picture of your marketing performance.
If you need help strategizing and executing your marketing campaigns or figuring out how to track your actual ROI, don’t hesitate to contact Simplified Marketing.
Forecasted Marketing ROI Calculator
Estimate the potential return on your marketing spend.
