Too many protection businesses fail to keep track of the actual profit of each marketing source effectively.

They fail to associate the income of each lead source to the month that the marketing investment was made. This prevents them from making accurate performance-related decisions on each lead source.

Cashflow lies

Take this example of February 2018 from a cashflow perspective:

On the face of it, we have a positive cashflow for the month. But of course, this amount can include commission income from leads that were acquired in January, which is traditionally a very strong month.

Track it back

When we monitor the income from leads generated by the February marketing spend over the subsequent months, let’s see what happens:

Surprisingly, from the profit perspective, February appears to have been an even better month!

Split by source

But, what happens when we break it down by marketing source? As they’re both equal spends I have assumed the operational cost split between both marketing sources.

By associating the income to the month that the leads were gained, we can reveal some very important information.

Marketing Source B is not making any money at all and requires some serious questions.

Keys to calculating marketing ROI

There are the two following key requirements for calculating marketing ROI:

• Associating the income with the month the leads were generated
• Splitting out each individual lead source

Unless you break down each KPI by source AND associate future income with the month that the sale took place, I’m afraid you’re flying your business blind.

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