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    How to Calculate ROI for Teen Program Marketing

    Posted by TeenLife


    Teen programs spanning all niches need to make decisions about the most cost-effective ways to attract new customers. To find marketing initiative success, there are a few marketing metrics and KPIs that you should measure and track regularly. The good news is, there’s a science to understanding and predicting marketing channel effectiveness. 

    Learn the marketing metrics you should be tracking, what they mean and how to use them to inform your marketing decision-making.

    What Is ROI and Why Does it Matter?

    Return on investment (ROI) helps companies understand whether an investment was profitable. This metric accounts for how much you paid for an investment and compares it to how much you earned as a result. 

    For example, if you invest $10,000 in Facebook ads, you’ll want to see enough student enrollments to at least offset those costs. But ideally, to make it worth it, by turning a profit and not just breaking even. Earning enrollments that total $11,000 would give you a 10 percent ROI on your investment.

    Calculating ROI matters because it provides a broader perspective than solely looking at how many enrollments came from a tactic. What might look like success on the surface might actually be a losing strategy because you didn’t fully cover your expenses.

    Marketing channels also vary in cost. You might get 10 new enrollments from both Facebook ads and Google search ads. On the surface, that looks like both were successful. But when you dig deeper, you find that the Google ads cost far less than the Facebook ads, making Google the channel with greater ROI and worth the ongoing investment.

    Benefits of Calculating ROI

    Calculating ROI from marketing initiatives provides many outstanding benefits.

    1. Ability to measure profitability and not just gross income from a tactic.
    2. Provides a way to compare marketing channels that would otherwise be comparing apples to oranges.
    3. Can show the alignment of goals or inform goals for your next campaign by understanding historic performance benchmarks.
    4. Proves the marketing team’s contribution to revenue and program growth.

    Important Marketing Metrics that Help You Calculate ROI and Success

    It's an old adage, and it may go without saying, but "If you don't measure it, you can't manage it." Getting on top of marketing effectiveness means taking a moment at least monthly to track how well you're doing. You should record at least these two things:

    Number of Inquiries vs. Number of Enrolled

    There’s a significant difference between obtaining a lot of inquiries and having only 2 percent of those inquiries become registrants versus obtaining high-quality inquiries and having 50 percent of them become registrants. To understand which marketing channels provide you with the most qualified inquiries that are most likely to become registrants, track your number of inquiries.

    Track leads for your company overall and for each marketing channel. Every new inquiry comes from somewhere – a past participant referral, an email campaign, a visitor at a fair. Continuously tracking inquiries from leads and registrants will help you determine which leads are most qualified and likely to become registrants. 

    For example, say that most of your past and current participants learned about your program through social media. Based on the data, you can determine that the most qualified leads come from your social media. From here, your sales team can prioritize their efforts to focus on these best-fit leads to gain greater program attendance. 

    To do this effectively, you need to set up your website analytics to track conversions. And for those that you can’t track back to a source, you should ask the lead when you interact with them where they first heard about you. Referrals can be the most challenging lead source to track back to because they’ll look like direct or organic search visits. 

    Know Your Average Conversion Rate

    After you’ve compiled performance data for a month or so, it’s time to answer the key question in marketing assessment: how many inquiries did it take before you got one new program participant? The inverse of that number is called your average conversion rate (#participants/# inquiries).

    The average conversion rate starts from the basis of an inquiry and tells you how many participants you should expect to derive from any one of them. This number, calculated company-wide, is your baseline metric. 

    It's how you assess your marketing effort overall and the relative effectiveness of the individual channels you use. By determining a set of conversion rates, one for each of your marketing channels, you'll see immediately which of them is driving your business forward, and which is holding you back. Review the examples below.

    At the five high school fairs you attended, you received 240 inquiries. Of those, 12 students enrolled in your programs. Your conversion rate for fairs is 5% (12 enrolled ÷ 240 inquiries).

    Say you upgraded to a Featured TeenLife listing and garnered 300 inquiries. Of those, 10 students enrolled. Your conversion rate for TeenLife is 3% (10 enrolled ÷ 300 inquiries). While one could say that the fairs were more successful because they yielded a higher conversion rate, the cost per enrollment may tell a different story.

    Understand Your Marketing Investment

    Your total investment in marketing and promotion is greater than you might think. In addition to the variable costs that are associated with each of your channels (event costs, travel, advertising costs, postage, online directory participation, etc.), there are ongoing fixed costs involved in your marketing effort as well (payroll, technology, contract staff, and other overhead). 

    Fixed costs are ongoing expenses you pay every month to keep everything running — costs that aren’t associated with any one marketing channel.

    Still, you must maintain your ability to execute marketing programs. To understand how much each program has truly cost you, you need to allocate a portion of your fixed costs back to each channel you’ve used.

    By determining the percentage of your enrolled participants from each channel, you will know where to allocate your fixed marketing expenses among them. The record-keeping described above should make this easy. Combining each channel’s variable and fixed costs will tell you exactly how much money you’ve been spending on your respective marketing activities.

    Know Your Cost-Per-Inquiry and Cost-Per-Acquisition

    Knowing your conversion rate for each marketing channel allows you to assess relative performance — but it’s only one part of the picture. You must keep in mind that although a channel has a high conversion rate, it may still be too expensive to justify. Or maybe something you’ve been doing on the cheap with negligible costs is worth continuing despite a low conversion rate.

    To make these assessments, you need to determine your cost-per-inquiry (CPI) and cost-per-acquisition (CPA) for each marketing channel. The math is simple if you’ve been keeping good records:

    Cost-per inquiry = Marketing Costs (Variable Costs + Allocated Fixed Costs) ÷ Inquiries Received 

    Cost-per-acquisition = Marketing Costs (Variable Costs + Allocated Fixed Costs) ÷ 

    Program Participants Acquired 

    Doing this creates a fair standard for comparing channels against one another. If you define “marketing success” as getting someone to enroll in your program, you now know exactly how much you must spend to achieve success in each channel. It’s a powerful bit of knowledge.

    Set Benchmarks for Marketing Performance and Return

    You must know what the following key marketing metrics are for your business overall. 

    • Conversion rate
    • Cost-per-inquiry
    • Cost-per-acquisition

    Those are your marketing channel assessment benchmarks. It’s not a hard-and-fast rule, but it’s generally good practice to emphasize the channels that are outperforming your benchmarks and to minimize the channels that are underperforming your benchmarks.

    The Value of Tracking Conversion Metrics

    By tracking and monitoring these marketing metrics, you’ll be better able to attract and convert leads into registrants for your teen programs. How can we be so sure? Throughout the years, the team at TeenLife has learned the best marketing strategies from experts in the field — our program providers! If you have questions about how any of these points apply to your organization’s unique situation, we’d welcome the chance to help you out. Reach out to us and let’s get started!

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    For more information on this and other great programs for high school students, go to www.teenlife.com.