What’s the ultimate goal of every successful SaaS marketing strategy?
You guessed right. It’s Return on Investment.
ROI is one of the most important performance metrics that indicates the efficiency and profitability of all your marketing campaigns.
Thus, without measuring the results, marketing can feel like shooting in the dark.
Surprisingly, while return on investment is the most crucial metric used to assess the effectiveness of marketing by every SaaS business, only a few marketers can measure it well.
For example, healthcare SaaS companies such as Giosg developed specific products related to healthcare business only that helps healthcare business to generate relevant HCP engagement for their businesses.
Here is the proof:
According to a recent study by Allocadia, 47% of marketing leaders struggle to calculate ROI:
Image via Allocadia
Are you struggling to calculate your SaaS marketing ROI as well?
You have come to the right page.
In this quick guide, you will learn how to calculate ROI for your B2B SaaS brand.
Let’s get started.
What is the ROI of B2B SaaS Marketing?
Marketing ROI of B2B SaaS is simply the ratio of the profits you generate compared to your marketing costs.
Calculating ROI helps you understand which of your marketing strategies are producing positive results, and which are burning your efforts.
In this case, your ROI is positive when your marketing efforts are generating more profits or tangible results.
1. How to Calculate B2B SaaS Content Marketing ROI
Granted, a content marketing campaign can have several objectives but, the most important goal for B2B SaaS brands is educating the audience.
Why?
Because when creating content, you are not only focusing on attracting new product users but also educating the existing ones about the product—for instance, you could be explaining how people can use your product for other cases.
Furthermore, according to Attrock’s blog post, content marketing can be effective for lead generation.
Ultimately, measuring ROI attributed to content marketing can be challenging. For instance, it’s hard to assess what part your content plays in lead generation and capture.
However, your content marketing efforts will be realized in other metrics such as calculating customer lifetime value.
Nevertheless, assuming you want to evaluate ROI for SEO content marketing, the increase in the number of visitors to your website and conversion rate data can help you evaluate ROI.
2. How to Calculate ROI for Your Email Marketing Campaign
Email generates an ROI of $36 for every dollar you spend.
Unlike calculating ROI for your SaaS marketing campaigns for the above mentioned channels, evaluating ROI for email marketing is slightly simple.
This is because you’ll already have known the amount you spent on your email marketing campaigns.
In addition, you can leverage customer data acquired through email via your Google Analytics dashboard.
Better yet, you can leverage email marketing software to acquire customer data for your email marketing efforts.
For instance, assuming you spent $20,000 per year on email marketing campaigns that generated 400 new website visitors and these visitors generate a profit of $40,000 for your SaaS product yearly, your ROI will be:
3. How to Calculate ROI for SEO
Calculating ROI for SEO isn’t as straightforward as for PPC.
Here, you’ll need to go a step further to calculate the profit generated using SEO campaigns.
For instance, if your SEO campaigns attracted 10,000 more website visitors, how do you evaluate the profit earned for the visitors?
In this case, you’ll need to look at your Google Analytics insights to understand the average conversion rate for your product and multiply the rate by the number of extra website visitors you gained.
Assuming the average conversion rate for your SaaS product (according to your Google Analytics data) is 3% then your SEO efforts will have attracted (3% ×10,000) = 300 new visitors.
Multiply the number of new visitors you gained (300) by your annual gross margin per customer (if you’re calculating annual ROI), for instance, $100 then the profit generated from your SEO marketing will be 300 × $100 = $30,000.
In that case, if you spent $10,000 on your SEO campaigns, your ROI will be:
4. How to Calculate B2B SaaS Social Media Marketing ROI
Similar to content marketing, calculating ROI for your social media marketing campaign can be tricky.
Why?
Because most social media marketing strategies are focused on qualitative factors that are hard to measure like building brand awareness, engaging with your target product users, etc.
For instance, the impact of social media marketing will show up in other vital SaaS growth metrics like Activation Rate, Customer Lifecycle Value, etc.
In fact, Customer Acquisition Cost (CAC) is listed among the top 5 KPIs that matter for a growing SaaS subscription business in a Younium post.
In that case, if your social media campaign increases brand awareness efficiently, your monthly recurring revenue and annual recurring revenue will start to increase steadily.
5. How to Calculate ROI for Your PPC Campaign
In this case, since you will spend money on ads in your B2B SaaS marketing campaigns, we’ll calculate RoAS (Return on Ad Spend). ROI and RoAS are essentially the same thing so don’t get confused here.
Example: If you invested $5,000 in a B2B SaaS PPC campaign and generated a profit of $10,000, your RoAS would be:
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Conclusion
Understandably, calculating the ROI of B2B SaaS can be tricky.
But consider this—according to the study mentioned above, ROI is the key metric to prove the effectiveness of marketing for 96% of companies.
So, if you’re struggling to measure ROI for your B2B SaaS marketing then we hope this quick guide will help you accomplish this.
Author Bio – Reena Aggarwal
Reena is the Director of Operations and Sales at Attrock, a result-driven digital marketing company. With 10+ years of sales and operations experience in the field of e-commerce and digital marketing, she is quite an industry expert. She is a people person and considers human resources as the most valuable asset of a company. In her free time, you would find her spending quality time with her brilliant, almost teenage daughter and watching her grow in this digital, fast-paced era.
Social connects: LinkedIn, Twitter
