Attack your biggest opportunities for growth
See below to learn how this free ROI calculator helps you forecast optimization impacts, and prioritize experiments in your marketing funnel.
Step 1. Enter your funnel data into the calculator
TIP: Pick one customer journey at a time. That means one channel.
How much money you’re paying to get new customers.
- Cost Per Click
How much you pay — per person — to get them to engage with your business. We find that this ROI analysis tool is most effective when focusing on a single channel, like Facebook, Google, YouTube, etc. (You could substitute this out for visits to your website, video views, or any other top-funnel metric).
- Conversion Rate
The percentage of people who go from one funnel stage to the next. This could be upper-funnel, like viewing a pricing page or an AddToCart event or booking a demo…OR bottom-funnel, like completing checkout, registering for a paid plan, downloading an app, etc.
- Average Customer Value (ACV)
How much money a customer is worth to your business. A rough estimate should suffice, but if you’d like a more accurate picture you’ll need to factor in referral rate, repeat purchase rate, etc. (read this Hubspot guide for a deeper understanding).
Need help building or visualizing your funnel?
See our step-by-step guide
Step 2. The ROI calculator will automatically fill out the rest of your funnel
How much money you’ll make on average from all your new customers. Pay close attention: this number may be more than your Spend — in which case you’re losing money!
- Return On Investment (ROI)
How much money you’ll make as a percentage of the money you spend. This is an ROI calculator, after all!
Step 3. Experiment! Play with your ROI inputs
Example: Let’s say you have a marketing budget of $1,000. You decide to buy ads on Google.
You check Google AdWords and see that in the last 30 days, your average CPC has been $2.
Now your ad does go to a landing page, and you see in your analytics that only 8% of the people who click make it to the next step – let’s say it’s adding an item to cart or booking a demo.
Lastly, you know that about half (50%) of those that hit the ‘key event’ step ultimately reach your bottom-line growth goal – and that a customer is worth $150 in revenue on average.
As you can see in the example funnel above, $1000 spent on 500 clicks for 20 customers results in $3000…or 200% ROI.
Now, here is the magic of this ROI calculator. Your growth strategy could take many paths, and the calculator will show exactly what they need to look like in order to reach your goal.
- If I were to increase the amount of traffic that reached they key event to 12% (up from 8%), my revenue would increase to $4500 @ 350% ROI.
- Alternatively, I could focus on optimizing my ad copy or placement to bring my CPC down to $1.30 (from $2) – this would also result in $4500 in revenue @ 350% ROI.
- Or perhaps I launch growth tactics to activate my customers a second time, turning 50% of customers into repeat consumers. This would bring my ACV up to $225 (up from $150)… again, resulting in $4500 in revenue @ 350% ROI.
Use this ROI calculator to set your optimization goals – your marketing OKRs – leveraging the calculator’s funnel economics to forecast targets you need to hit to reach your bottom-line goal.
Put your numbers in the ROI calculator, then see how changing different numbers affects your ROI. And, think about what tactics and strategies would be most likely to succeed in hitting your targets.
Not sure which marketing funnel stage to target?
Try these suggestions
Business funnel analysis is the most powerful way to grow!
Ladder specializes in full-funnel marketing analysis. Imagine if this calculator could look at your numbers and tell you exactly what you need to do next to reach your growth goal. That’s us! And it’s the definition of ROI-driven growth strategy.