You spend money to make money. This is an old saying, but a true one. When you invest in marketing and advertising, you’re essentially spending money to get your business more visibility and exposure. Any digital marketing lead generation campaign is a long-term strategy (unless you’re willing to spend the big bucks to get some instant results).
As it stands,
- 82% of B2B marketers viewed social media as the top growing marketing channel in a 2021 survey
- 81% of B2B marketers primarily use LinkedIn
- 40% of B2B marketers say that LinkedIn is their most important social platform.
In our experience, your lead generation campaign’s ROI is not something that can be measured accurately in a day, a week, or even the first month of your sales cycle. Instead, it’s something that builds up momentum as time progresses, and you make adjustments based on the data you’re collecting along the way. So, how do you measure your return on investment in LinkedIn campaigns? How do you optimize it?
We understand that it can be hard to see an instant ROI boost in your lead gen campaign when you’re still waiting for those leads to convert into customers and revenue. The good news? That doesn’t have to be the case because today, we’ll show you how smart marketers like you should supercharge their ROI by ironing out the weaknesses in their LinkedIn lead generation campaign.
Read on to learn how to calculate ROI for your lead gen campaign and optimize it for future endeavors!
Recap: What is ROI
Return on investment (ROI) is a measure of how profitable a company is. In accounting terms, it is a financial ratio used to assess the viability of a project by comparing the amount of revenue generated by the project to the amount of money spent to create the project.
Calculating ROI provides insight into whether funds are being used wisely and effectively. ROI is a measurable way of assessing whether your business investments are providing you with a positive return on your money. The greater the return, the more profitable your venture is.
How to Calculate ROI on a LinkedIn Lead Generation Campaign
In digital marketing lead generation, the return on investment is calculated by taking the profit generated from the campaign and dividing it by the total amount spent on the campaign. The result is multiplied by 100 to convert it into a percentage. Profit is calculated by subtracting the total cost of the campaign from the total revenue generated by the campaign.
When calculating ROI for lead generation campaigns, it’s important to take into account the total cost and profit of each campaign. For example, if you spend $500 on a campaign and generate $5,000 in revenue from that campaign, your ROI can be calculated as follows:
5000-500Â x 100 = 900%
500
However, ROI is not just a game of numbers because a lot goes into the total revenues and expenses incurred by your company.
The more you know about how your marketing dollars are spent and how they affect the bottom line, the better decisions you can make about your LinkedIn lead generation campaign. It’s crucial to track your ROI at the end of your sales cycle and ensure that you are getting the most bang for your buck!
LinkedIn Lead Gen ROI vs. Other Types of Lead Gen Campaigns
How do you compare the ROI from one lead generation campaign to another? Let’s say your marketing team has generated leads from three sources:
- A Facebook ad campaign
- A Google AdWords campaign
- A LinkedIn advertising campaign
From a financial standpoint, the ROI definition in all these campaigns remains the same no matter what channel you use. From a B2B lead generation standpoint, things are a little different partly because of the additional metrics that point down to your company’s ROI. A better illustration can be derived from a 2019 LinkedIn report.
The report concludes that LinkedIn marketers measure KPIs instead of the actual ROI if they attempt to calculate the return on investment long before the end of the sales cycle. This report further adds that:
- 77% of marketers measure returns during the first month of the campaign, which is too soon. A normal sales cycle lasts about 6 months.
- Only 4% of marketers measure ROI after 6 months or longer.
- Marketers who measure ROI too soon are actually measuring KPIs and not the actual ROI.
Some of the key performance indicators mistaken for the actual LinkedIn ROI are:
- Reach
- Cost per lead
- Likes/shares/followers
- Number of leads
- Conversion rates
These numbers are a mere pointer of the expected returns by the end of the sales cycle. For greater accuracy, you can analyze the results of your previous digital marketing lead generation campaigns and optimize your efforts. If you’re getting a large number of leads from one particular campaign, you need to divert more resources toward it.
If you’re getting leads from several campaigns but don’t have enough resources to follow up on all of them, you need to select the most profitable campaign to focus your attention on.