How can I increase my return on marketing investment?

There are two types of marketing. One is brand; the other is everything else. We say this because brand is very difficult, if not impossible, to quantify. We recommend that a budget be dedicated to brand marketing with the belief that it will be valuable even though it isn't measured.

EVERY OTHER marketing program should be tracked and judged for its ROI. The most common error made by new marketers is to subtract the cost of a program from the revenue it generated. However, to accurately determine the ROI, you must subtract the program cost from the gross profit margin, not the gross revenue. The very simple formula would look like this for $150,000 of revenue generated, with a 50% gross profit margin, and a marketing investment of $30,000:

(Gross profit – investment) or ($75,000 - $30,000)