In today’s ever changing world of hyper competition, running a successful promotional marketing campaign is increasingly challenging. Consumers have far more choices these days than they did even 5 years ago. They are bombarded with thousands of ads daily.

When it comes time for a consumer to make the final purchase decision, you have to have done your homework to ensure they chose you and not your competitor.   To do that, you must master the fine old art of promotional marketing. This is the marketing that happens closest to the point of sale, often times as your product is picked up off the shelf or consumed in a bar or restaurant.

These point of sale decisions may not look like you have much influence over them, but if you have developed the right promotional strategy and deployed the right promotional marketing concept, you can win the game and achieve your ROI objectives.

Promotional marketing campaigns

Promotional Marketing Campaign ROI Calculator

Types of Promotional Marketing Activities

There are many, many types of promotional marketing solutions, including:

  • Various Types of Contests and Sweepstakes
  • Video and Foto Tag Competitions (one of many types of UGC (User Generated Content) types
  • Register to win giveaways
  • Rebates and Cash-back
  • Instant Wins
  • Multi-Channel Promotions
  • Incentive Programs
  • Coupons

These happen to be the ones we have used with great success on over 3,000 campaigns across a wide variety of industries.   Successfully using any of them, required a clear employment strategy and as well, a clear focus on the expected ROI or Return On Investment.

Though it would appear simple to determine the ROI of a campaign, really, just an equation that takes into account what you made and what you spent, it actually takes quite a few data points to determine your ROI. But ROI, by itself, doesn’t typically answer all the relevant financial questions our clients have about a proposed campaign.

To answer those questions, we’ve developed a calculator that helps us explore and explain the potential ROI of any promotional marketing campaign we want to run.   Like all such calculators, it requires the input of only a couple of key numbers and the computer does the rest.

The magic sauce is that we have integrated our unique experience into the calculator.   So, what do you need to know to run the calculator and what results do you get from it?

What are the required inputs you need to provide to use the calculator

Campaign Parameters

  • Campaign duration. This is usually given in days. For instance, you will run your campaign for 30 or 90 days.
  • Number of Sales Units Per Day. How many sales per day do you need to sell to hit your campaign objectives?

Expected Campaign Costs

  • Technology cost, such as marketing platforms. Though we provide default values for these inputs, based on our own experience, you can also input your own.
  • Communication and support cost. Though our campaigns are designed and deployed on an automated system, our physical to digital campaigns have additional support cost.
  • Prizes (Value). If your campaigns involve a giveaway or other type of prize, it will have an associated cost which is required to compute your ROI.

Product Pricing Details

  • Product Price. To keep things simple, we use only a single product price.   We realize that many campaigns will require a range of product prices to fully capture the entirety of your campaign.
  • Margin Per Unit. This is a key part of determining your ROI and must be expressed in percentage terms.

What Results Do You Get From The Calculator

Given the inputs above the calculator is configured to deliver the follow results. However, the Participation Percentage Rate is open for user input and you can change it as often as you like without changing the initial inputs. We have defaulted it to a typical promotional campaign participation rate we experience here in Spain.

  • Total Number of Units in the Promotion. This is simply the result of multiplying the campaign duration by the number of units to be sold each day, and does not change when you change the Participation Rate Percentage.
  • Participation Percentage Rate. This is a key number, as it reflects the very high participation rates from our promotional campaigns. It is also easy to use it to perform sensitivity analysis of your campaign.
  • Number of Contacts Generated. This is the number of contacts, typically emails, you will generate given your participation rate and the number of units in the promotion.
  • Cost per lead. This is the cost it takes for you to generate one lead during the campaign. These cost are typically much lower, on a cost per lead basis, than other types of lead generation approaches.
  • Total Sales Revenue. The total sales revenue that will be generated during the campaign.
  • Total Sales Margin (Profit). Probably the most important number of all, the total amount of profit that this campaign will generate for your company.

As you can see, with just a few data points, you can quickly determine the potential ROI of any given promotion campaign. You can also use this same approach to set goals.

Setting Goals

With just a few changes to the underlying model to this calculator, you can also use it to set a financial goal.   For instance, if you work in the area of Trade Promotion Marketing, you will typically need to sell a certain volume of product each year. Throughout the year, you will need to plan and execute a series of integrated marketing campaigns that will be designed to sell a subset of your annual quota.

To do that, if you wanted to, you could plan a series of promotional marketing campaigns that were each designed to deliver a percentage of your target revenue.   This typically involves more than one campaign and we can help you plan those out and ensure you hit your annual sales quota.

Understanding The Value of Data From Your Campaigns

Aside from the high ROI of any individual well planned promotional marketing campaign, there is another major benefit from running multiple campaigns – data and insights.   When you run multiple campaigns, all integrated within an overall marketing strategy, you can collect unique data that is unique to you and your customer base.   This data can be a real goldmine to you, the marketer.

That is why you must have a measurement plan as well as a data collection and reporting system, which is a core part of your campaigns.

Determining the ROI of Your Next Promotion

In the meantime, if you want to determine the potential ROI of your next promotion, you can use our promotional marketing ROI calculator. If you have any questions about it, please don’t hesitate to reach out.

Calculate the ROI of Your Next Promotional Marketing Campaign!