How to calculate Marketing Automation ROI? [Calculator]
Should you invest in marketing automation?
Yes. It will increase revenue by 10 to 30%, average deal size will go up by 45% and companies with marketing automation generate 50% more sales ready leads. Time spent by sales reps on actual selling activities will increase by 23% and 8% more campaigns are launched. Additionally, you will save 15% on creative production costs.
This is what benchmark studies from different firms in the industry tell us. Promises are high and there are good reasons for it. But only because marketing automation can deliver profit does not mean that it is a good investment for the business.
Why most ROI calculators are not good enough
Marketing technology investments need to be evaluated the same way other business investments are evaluated. Unfortunately most ROI calculators available online do not really calculate marketing automation ROI. First of all because often they don’t really calculate ROI. Typically, investments are not included in the calculator. Second, ROI (formula) is probably not what you are looking for. What you need is net present value (NPV). NPV can be used to determine whether a project investment is likely to return in a net profit or a loss. A positive NPV results in a profit, while a negative NPV results in a loss. The NPV is determined by calculating the present value of the total benefits and costs which is achieved by discounting the future value of each cash flow over 3 or 5 years.
What’s in it for you?
Business cases are based on assumptions regarding project investments and project benefits. When creating a business case for marketing automation it is important to consider more cost items than license fees only. All project costs including professional services and training as well as projected changes to all running costs (e.g. content creation, FTE) need to be included. Only then will you be able to get more insight into (1) whether investing in marketing automation is beneficial or not and (2) whether investing in marketing automation is a better choice compared with other investment opportunities.
Business case scenarios
It is good practice to always explore different business case scenarios before making an investment decision. This allows you to see what happens to the business case if, for example, marketing budgets change, if the project gets delayed or if you decide to invest more in training or professional services.
Try the business case simulator to get a first idea of what marketing automation can do for you or get in touch to order a custom business case for your organization.