In the competitive landscape of senior living communities, making your mark is crucial. Your marketing strategies not only set you apart but also draw in the families and individuals seeking a place to call home. So how do you measure the success of your marketing endeavors? The answer lies in calculating your marketing ROI (return on investment). This metric unveils the effectiveness and financial return of your marketing tactics. Let’s delve into how you can accurately measure your marketing ROI to ensure a thriving community — and bottom line.
Understanding the basics
Before diving into calculations, it’s essential to grasp the core components involved in determining your marketing ROI. At its heart, this metric involves tracking inquiries and leads generated from each marketing tactic, summing the costs for each tactic and analyzing these figures to gauge your investment’s effectiveness.
Tracking leads and identifying sources
It’s essential to know where your leads come from. One way to track which leads come from which tactics is by using dedicated URLs and tracking phone numbers. If your Facebook ad, for example, uses a unique link and phone number, you’ll know that any inquiries coming from them were converted from your Facebook ad. We suggest tracking these numbers monthly.
Crunching the numbers
Calculating cost per lead (CPL): To calculate your CPL, add up all the costs associated with each marketing tactic. This includes media spend, any software costs and costs to produce and manage the ad (placing the ad on the platform, optimizing bids, analyzing reporting, etc.). Some communities also allocate sales salaries across the various marketing tactics. The sum represents your investment in that tactic. Divide these costs by the total number of leads generated to determine your CPL.
CPL = Total Cost of Marketing Tactic / Total Number of Leads Generated
Next, work with your finance team to identify the value of a sale by analyzing the long-term financial value a resident brings to your community (i.e., the total revenue generated from a resident during their stay). Some communities have a formula for projecting the average value of sale, and others may need to define a calculation they’re comfortable with based on factors such as the resident’s contract, average length of stay and refund options (for entrance fee communities).
Calculating marketing ROI
Now, with all the groundwork laid, it’s time to calculate your marketing ROI. Multiply your total sales by the lifetime value of a sale and divide this figure by your costs. This calculation will yield your marketing ROI, a clear indicator of the financial return on your marketing investments.
Marketing ROI = (Lifetime Value of a Sale x Number of Sales) / Total Costs
Evaluating and adjusting
Post-calculation, assess the ROI to understand the effectiveness of different marketing strategies. Are some tactics outperforming others? Is there a need for reallocating budget to optimize results? Continual evaluation and adjustment are pivotal to refining your marketing approach and achieving a higher ROI.
Calculating marketing ROI isn’t just a numbers game; it’s about understanding the value and impact of your marketing efforts. By meticulously tracking, analyzing and adjusting your strategies, you’ll not only achieve a robust ROI but also foster a thriving community that resonates with prospective residents and their families.