You’re feeling ecstatic. You just started your dream business.

You have done setting up your physical store, distributed the flyers, and installed posters within your vicinity. You did your homework. Your product or service has high quality, your price is on par with the competition, and there’s a demand for it. You know that this business would work. Yes, finally, your business is now ready for primetime.

However, after a couple of months of operation, you’re disappointed with your sales.

How is that possible you may ask?

There’s a ton of potential reasons but one of the biggest culprits is marketing. In today’s internet age, it’s Digital Marketing to be exact.

Business owners, you may just be missing the known secret of modern business’ virality and success.

DIGITAL MARKETING

The fundamentals of marketing haven’t changed – it’s still giving potential clients the emotional and rationale reasons to purchase your product or service. What changed is how businesses MUST do it.

Digital marketing is one the result of those changes due to widespread use of internet and digital devices. As our behavior in doing business becomes more internet-propelled, so does marketing.

Basically, any marketing or activities done to reach customers over the internet is considered as digital marketing. It leverages familiar channels like social media, email, website, and search engine to connect to your target audience.

HOW DIGITAL MARKETING HELPS SMALL AND MEDIUM BUSINESS?

Doesn’t matter if you just started your business or an established medium-sized business, there is a huge and untapped potential in digital marketing.

Do you want to connect to customers outside your city? How about providing convenient support for your customers? Do you want to grow your sales quickly? Then go for digital marketing.

Marketing through the internet provides you the ability to tap thousands of customers over the internet instantly. Though flyers and posters still work, in some ways, it can’t keep up with the flexibility and cost-effectiveness of its digital version.

Flexibility. Traditional marketing requires you to work with physical resources like printed collaterals, brochures, bill boards and the like. If you have the budget, ads for radio and tv commercials could be an option. All of them require significant investment in terms of planning, time, and budget since you have to do it right the first time. Because when they’re out for display, you can’t change them anymore.

In digital marketing, you only need an internet connection, an account in Facebook, and a business page, then you can start reaching your customers. And with the increasing number of internet users each year, the more people you can connect and market your business.

Furthermore, unlike traditional marketing, digital marketing enables you to update your marketing collaterals – digital flyers, social media posts, website headlines -- easily and quickly based on real-time customer behavior. Yes, you can do instantaneous analysis of your online marketing efforts with the right tools which is non-existence in traditional marketing.

Cost-Effective. Any type of business would prefer low cost investment with high returns. That’s even true for small and medium businesses. This makes digital marketing even attractive.

Let me try to share with you some sense of optimism.

For example, in social media, spend only $5 and reach 1,000 people. That’s 3X less costly than traditional media. When you advertise in Search Engine, commonly known as Pay-Per-Click, business average revenue per dollar spent is $2 which is a 200% ROI. Now, you see?

Those were just two out of many digital marketing channels. Based on your business goals and strategy, you have a number of channels to choose from.

WHICH DIGITAL MARKETING STRATEGY IS BEST?

Here are some common strategies:
- Business Website
- Search Engine Optimization (SEO)
- Content Marketing
- Social Media Marketing
- Email Marketing

They all have the same objective – connect your product and services to your audience – but different in approach and use.

Here are a few examples.

For starters, especially for new business owners, creating social media is a quick way of sharing your business to the world. That’s because it’s accessible and a cheap way to advertise your product or service. Social media platforms like Facebook, Instagram, and Pinterest provides an easy way to create a business page and advertise your posts.

To formally bring your business in the digital space and boost your credibility, a business website is your best friend.

There are online services that can help you DIY a website but for quality results I would honestly recommend to ask professionals to do it for you. Why? It brings me to my next point – SEO. No DIY tool can do it right and in a sustainable manner for you.

SEO is crucial to make sure that people can find your website. It assures that your website has the technical requirements and the right content so search engines like Google can serve your website to the right audience.

As you can see. Your digital marketing can contain different strategies and channels to maximize its effectiveness. It’s important that you plan ahead and make sure that your strategy is aligned with your business goals.

Basically, each digital marketing strategy is best in their own right.

WHERE DOES THIS LEAVE US?

Those are just a few but real reasons why digital marketing is the norm these days.

Having a solid digital marketing plan for your business is a must to spur growth for your business. So, take your time to choose which strategy is best for your current goals. It should be accessible and should bring the most bacon to your business.

Go ahead and get your feet wet. You MUST adapt to the trend or risk to lose hundreds of thousands of potential customers just sitting in the subway.

If you need marketing assistance or you just want to focus on what you do best – building your product or service – give us a ping. Me and my team would be glad to help you.

Do you know what digital marketing strategy can give you the highest return on investment?

Email marketing!

No! It’s social media marketing!

Says who? It should be content marketing!

SEO is the answer!

But what about those influencers?

Huh? Haven’t you heard of pay per click (PPC)?

Okay. Calm down, people.

The answers above are all marketing channels. But the question is which strategy (if any) can give you the highest ROI.

MARKETING STRATEGY vs. MARKETING CHANNEL

Marketing strategy is a well-detailed plan to market your product, service, or your brand. It includes all the nitty-gritty details of each aspect of your marketing plan. It should also have everything you need from your brand identity, voice, audience, and unique selling point (USP). A sound marketing strategy should meet your goals, objectives, and results you want to achieve.

Marketing channels serve as a way of communicating. Options like social media, email marketing, content marketing, among others are all marketing channels.You use them to communicate your marketing strategies to your target audience.

Marketing strategy is a blueprint for success.

Just like the old saying goes, “If you fail to plan, you plan to fail.” Very true for digital marketing.

After laying your marketing strategy, now you can choose the best-fit marketing channels.

Now, are you ready to know what marketing strategy yields the highest ROI?

Before we dive into the answer, let’s first answer what is ROI or return on investment.

ROI EXPLAINED

According to Investopedia, return on investment or ROI directly measures the amount of return on a particular investment, relative to the investment’s cost. ROI can be shown as a percentage or in ratio.

You simply have to look at two things: the cost (expenses) and the outcome (income) generated.

Why is the return on investment important?

Because in marketing, ROI answers the question, “Is your marketing working?”

Business owners, clients, and investors want to know if their business is profitable.

Moreover, you, as the business owner, are also concerned about things like sales funnels, awareness, searches, site traffic, and much more.

You need to track your money and where it is being spent. You have to be financially wise. You hope your business will have the longevity to last past your next life.

ROI CALCULATED

Going back on ROI, if you spent $1 on marketing, how much income should you expect?

Using the definition above, we can calculate ROI this way:

Income / Cost = ROI

Hmm. Looks simple? Not really.

Let’s break it down a little bit more.

When you say “income”, what is it? Is it the income for one product or for one marketing campaign? Is it the sales of one product or all products in your shop?

Next is your “cost”. What is really your “cost”? Is it the cost of the marketing strategy or the person doing the strategy? If you’re using one marketing strategy for all your products, would you divide the cost equally?

Now, it’s becoming tricky.

Figuring out what specific part of the sales is directly attributable to one marketing strategy can be complex. However, if you want to go ahead and do this, well, I won’t stop you. But let me warn you -- measuring ROI this way takes time, patience, and access to the company’s financial statements.

Measuring ROI this way isn’t always realistic.

This is where revenue to marketing cost ratio (magically) appears!

REVENUE-TO-COST RATIO

Being a ratio, it shows the revenue for every dollar spent.

As a rule of thumb, a good marketing ratio is 5:1. Meaning for every $1 spent on marketing, you should earn $5.

You can wish for a 10:1 ratio because it’s possible. But don’t make it a benchmark.

You can always change this ratio depending on your industry and cost structure.

Why is this a good ratio?

Because this covers the cost of making a product and marketing it.

So, what’s a marketing cost then?

Marketing cost is any additional cost incurred to complete a marketing campaign. This includes media spending, outside marketing and advertising fees, pay-per-click spending, among others.

FINAL THOUGHTS ON ROI

Calculating revenue from marketing activities is difficult. Strategies like SEO, content marketing, and social media are used way before the actual sale takes place. There are some marketing software platforms available that you can try.

Knowing your return on investment is very important but is also complicated.

And remember, numbers are not everything!

There are some marketing activities that you can’t measure perfectly BUT is worth considering.

Marketers should always look at connecting dots between activity and revenue. Technological advances are always present and can provide better insights over time.

Remember, marketing is about generating revenue.

Marketers should be serious about associating activities with revenue at all times.

GOING BACK

So, to answer the original question of which marketing strategy gives the highest return on investment…

The answer is: IT DEPENDS

In reality, digital marketing strategies work!

Yes, people, all of them work!

The results, however, depend on how you maximize each marketing channel and lay well-planned strategies on the table.

There’s no one size fits all when it comes to digital marketing.

To help raise awareness of your brand and product, you have to create content, apply SEO, and use social media. Or send emails. Or go for a paid advertisement.

To sell your ideas, you can do webinars and send emails. Or directly do a product launch. Or SMS blast.

To pitch for the sale, you can create a sales page or a sales letter. Or create a Facebook or IG or Twitter page. Or look for influencers and ask for a partnership.

Always use each digital marketing channel to your advantage and strategize well based on your current business goals.

Remember: Digital marketing channels will give you optimal results - given you utilize each and never stop learning, analyzing, and strategizing.

You just have to tie up your marketing efforts to your ultimate goal - generating revenue.