Are you struggling to calculate the return on a marketing campaign or social media investment? Just apply this single, simple equation.
If you're a small business owner, look at the revenue to cost ratio: incremental revenue driven by a marketing campaign divided by the cost. It's a deceptively easy metric, but if you use it properly, you’ll be able to make the bold marketing decisions you need to grow your business.
Once you understand the revenue to cost ratio, it's easy to start ranking marketing decisions. Should I advertise in the newspaper? Should I pay to advertise on Facebook? Should I do a daily deal? All of these decisions can be put through this simple analysis to see if it's a good decision. You can estimate revenue to cost ratio up front, or you can try a campaign once and see if it passes your ROI hurdle.
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