First, if you are going from zero to one, negative ROI is a good thing. For example, if you are moving from selling your products to friends and family to them selling them to strangers. That scenario is a major shift, and it helps prove the viability of your business. If that is what you are trying to accomplish with your marketing, it is okay if you have a negative ROI on that.
Second, if you are using your marketing to do market research. Here at BeeSmart, we will use Facebook and Instagram Advertising to help our clients get to know their customers better get to than they currently do. If you are using your market for that -that is what you are purchasing when you are spending money on marketing. You are purchasing that research that you just cannot really get any other way.
Third, if you are focused on building your brand awareness that is not going to turn into ROI right away. It is okay if that is one of your main goals, to grow your awareness, influence, and followers. Negative ROI is a good thing during this phase.
Finally, some of our clients use their marketing budget to gain user-generated or influencer-generated content that they can use in other marketing. If you struggle to get images with your products, using your marketing budget to get those images and videos can help you grow your brand. If you’re using your marketing budget for this, you’re probably going to have a negative ROI on the actual budget. But on the flip side, you’ll have all of this great content that you can use in other marketing efforts.
As you can see, sometimes it is okay for you to have a negative ROI on your marketing budget. If you’re gaining customer insights, doing research, trying to generate content, or deepening customer relationships that’s okay. I think the idea of negative ROI gets lost quite frequently. When we get asked “What is the expected ROI?”, there’s a lot that goes into that answer. Sales aren’t the only benefit that marketing can potentially bring your brand.
If you have any questions about your marketing ROI, I would love to help you answer them. Just reach out let me know!