Introduction
We’ve said it before, and we’ll say it again: Sales isn’t for the faint of heart. At this point, we’ve given you lots to do—ways to nurture your prospects, tips to determine which leads to pursue, and instructions for turning those leads into buying customers.
You booked the wedding and closed the deal—congratulations! Now there’s only one question burning in your mind: Was it really worth it? We’re not talking about that feel-good sense of accomplishment when you finally see all those touches pay off. You want to know if Michelle—our sample bride from earlier courses—was worth the time and money you invested into landing her wedding.
Across the board, Eventective subscribers pursue less than half of the leads they receive. You can’t possibly pursue every lead—that involves a lot of time and money, and that’s why we spent much of Sales 102: Prospecting on the Internet helping you establish how to choose. Hopefully, you’ve been following those tips and tricks, you’re successfully choosing leads that are a good investment, and you’re following up in an effective and cost-efficient manner.
But instead of guessing or speculating if it’s all been worth it, let’s crunch some numbers and see how you hold up—it’s time to measure your return on investment (ROI).
Why Does ROI Matter?
Your return on investment is a simple way to determine if all the time and money you put into something paid out in the end. For Eventective users, it’s an effective way to measure if the time and money spent pursuing leads is worth the revenue they generated.
While there are other ways to determine the impact of an investment, your ROI gives you a level of flexibility that not all methods provide. You can take a snapshot of the big picture, and calculate the success of your collective marketing efforts at once—or you can focus in on specific initiatives to see which proved more fruitful.
Let’s say you invested in both an Eventective subscription and social media advertising last year. Which one paid off? A quick analysis of your return on those investments can help you choose which methods to keep pursuing in the future—or which methods are costing more than they’re worth.
Keep in mind that the goal isn’t to break even—the goal is to generate a noticeable return that you can use for future investments within your company. We’re not just looking for any positive number; successful Marketing ROI is typically between 5:1 and 10:1[1], the higher the better.
How Do I Find My ROI?
Calculating your return on investment is as simple as four easy steps:
- Calculate your lead-generation costs. These include any expenses you spent to purchase or pursue your leads—subscription fees, price of leads, and any other costs that might be part of your lead generation process.
- Tally up your lead-generated income. This includes any money that was generated by the leads you’ve booked through your Eventective subscription. Did they book you for a caterer? Maybe a florist? Even both? All that counts toward the end payout for a lead you’ve nurtured into a customer.
- Determine your overall lead profit. This is the what’s left over after you’ve subtracted your lead-generation costs from your lead-generated income. After all the bills have been paid, what did you ultimately make off of your Eventective leads?
- Divide your overall profit by your costs. Now that you’ve determined your overall profit, all you do is divide that overall profit by your lead-generation costs—there you have your ROI!
For those of you who like formulas, it looks something like this…
ROI Calculation
If this all sounds terribly confusing and super-important, let’s get to know Metro Max a little bit better. He’s going to help us navigate ROI with his own numbers, so you can see his breakdown and hopefully apply his technique to your own personal situation.
Real-Life ROI*
Metro Max owns a venue in the Los Angeles metro area. He’s an Eventective Premium subscriber, which means he pays $1,680 a year to advertise and access leads.
On an annual basis, Metro Max sees 2,300 leads. Holy cow! But remember—neither you nor Max have the bandwidth to pursue every lead. If you overspend on or neglect leads, chances are you’ll end up losing money, which leads to an extremely low or even negative return on investment. In the long run, a low or negative ROI might mean budget cutbacks, downsizing, or even closing—we want to keep that ROI nice and high!
Of the 2,300 leads he receives, he uses his expertise and some tips from Sales 102 to determine the best 560 leads to purchase and pursue. Now, the average lead cost is $3, but because Metro Max is a Premium Eventective Subscriber, all his leads are free. That doesn’t mean he should pursue every one, but he feels the freedom to be a little less picky.
So, let’s recap: Metro Max pays $1,680 yearly for his venue in the Los Angeles Metro, and he pursued 560 leads last year. Remember when we said Eventective subscribers see an average closing rate of 5%? That means that Metro Max closed 28 leads last year.
For his venue, he charges $500 for a day conference and $2,500 for a wedding. Because he’s in a large metro, he books more day conferences than weddings—in fact, 20 of his bookings were day conferences, and the remaining 8 were weddings. That’s a total lead-generated income of $30,000!
To determine his ROI from there, Metro Max calculated his overall lead profit from the past year—he subtracted his lead-generation costs of $1,680 from his lead-generated income of $30,000. He’s left with $28,320 in overall profit from his Eventective leads. To turn that profit into ROI, Metro Max divided his overall profit by his lead-generated cost for a total ROI of almost 17:1!
Metro Max’s ROI Calculation
Other Factors to Consider
Now, let’s not get carried away and think that Metro Max just made $28,320 on his $1,680-a-year Eventective subscription—he’s got to cover fixed-costs like his mortgage, electricity, and full-time staff; that all adds up. These fixed-costs are built into the price charged for an event and do not affect your Marketing ROI.
ROI for Smaller Venues
Overwhelmed by those large numbers, and worried that, because you can’t afford the price of a Premium Subscription, your return on investment will suffer? Never fear! City Sarah can show you how Basic Subscribers still see a notable ROI.
City Sarah is a bit different than Metro Max—she’s a restaurant, located in Cambridge, Massachusetts. Because of her size, she does not do weddings, but instead focuses on smaller parties and gatherings. The key difference between Sarah and Max is that she doesn’t have a budget anywhere near as large as his. So, what does her ROI look like?
As a Basic Subscriber, City Sarah pays $22 per month, or $264 a year, for her Eventective subscription. Also as a Basic Subscriber, she pays for each lead that she wants to pursue. The average cost for her leads is $3. Because she must pay for each lead, she’s a little more conservative with her choices—she carefully considers each lead and doesn’t waste a single moment in nurturing. That’s her favorite part of being a smaller venue—she feels invested in every lead, which helps her be that much more nurturing during the process.
City Sarah sees an average of 1,500 leads every year, and she budgets another $30 to pursue 10 leads each month—or $360 per year. City Sarah’s complete budget for subscription plus lead purchases gives her $624 in total lead-generation costs.
Recall that the average Eventective subscriber sees a closing rate of 5%, which would be 6 successful bookings from 120 leads—but Sarah was only able to book 5 of her leads last year. Being a smaller venue, Sarah mainly books private events like bridal showers and private dinners. The events range from $1,000-$2,000 per event, and last year City Sarah booked a bridal shower and a baby shower, each at $1,000, and three private dinners at an average of $1,500 each. All-in-all, she made a lead-generated income of $6,500. That leaves City Sarah with a return on investment of 9.4:1.
City Sarah’s ROI Calculation
Don’t Like Your Numbers?
As we saw with Metro Max and City Sarah, not every ROI is going to be the same—as a small restaurant in Cambridge, you might never see the high figures that Max sees. But that doesn’t mean you can’t increase your ROI.
There are so many factors in determining your ROI, and you might not be able to adjust them all. But there are factors you can control, and those should be your starting points to increase your return on investment.
Re-evaluate Your Numbers
If City Sarah can afford to pay for her full-year subscription up-front, she saves 20% by paying annually. Lowering her lead-generation costs to $571 increases her ROI to 10.4:1.
Bid on More Leads
This may seem out of your control—maybe there aren’t more leads that fit the bill for your company, or maybe you’ve already exceeded your monthly budget for leads. City Sarah could take that $53 in subscription savings and invest in additional leads that just might yield another booking. And don’t forget you can get refunds for non-responsive leads.
If you feel constrained by a monthly budget, try shifting to a quarterly budget. Some months you may be too busy to chase leads, so you don’t spend the entire budget. But when you have a budget based on three months at a time, you can use the extra money from May during peak wedding season to pursue more leads in June and July.
Upgrade to Premium
While individual ROI results will vary, if you have the budget to upgrade to a Premium Eventective Subscription, it could help bring that figure up to where you want it. As we saw with Metro Max, Premium Subscribers don’t have to pay for each lead that they want to pursue; all leads are free. So, while a small venue like City Sarah might not have the ability to upgrade her subscription, you might—and it’s worth looking in to. Contact an Account Manager to see what offers are available, and learn all the benefits of a Premium Subscription.
Follow Your Steps
The key to making your marketing investment worth it is to make sure you’re turning those leads into clients—that’s why Sales 201: The Art of Follow-up is so important. Be certain every contact you have with a lead sells your business. If you’re experiencing a low booking rate, re-assess your steps. Make sure you’re following them diligently—and if you are, don’t be afraid to personalize your 7-touch follow-up process. If your leads respond well to articles that you send, add more to the process. The schedule we laid out in Sales 201 was to get you started; how you personalize from there will depend on your clientele.
Conclusion
There’s no way around it—your return on investment is an important metric to evaluate your Eventective subscription. All the time, money, and resources that you invest into your leads should do more than break even in the end—it should bring in a noticeable profit to your company. If you’re not seeing the return that you want, contact your Account Manager to discuss your concerns. It’s our job to make sure that Eventective is working for you.
If you’re considering upgrading or changing your Eventective subscription, contact an Account Manager at 207-253-1653. And if you’re looking to adjust your approach to leads and how you pursue them, take a look at some of our Better Bookings eBooks for specific do’s and dont’s for grabbing a bride’s attention on your website alone and making that important first impression in person.
*Metro Max and City Sarah are personas based on Eventective customer data, but do not reflect real parties or venues. Individual ROI, lead results, and costs will vary.