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How to Calculate ROI In Restaurant Marketing

Marketing and advertising are excellent tools that restaurant owners can use to boost sales, promote new items, create excitement about a new business venture, increase brand awareness, and much more. And, while there are many free marketing tactics that businesses can use, such as social media marketing, many strategies cost money, and as a result, your business should be tracking them and their effectiveness.

One way you can track a marketing campaign’s effectiveness is by calculating your marketing ROI, or return on investment. Finding your restaurant’s marketing ROI ensures that you’re using your marketing budget appropriately and can help you determine which practices were effective and what should be changed in the future.

What Is Marketing ROI?

Marketing ROI, also referred to as return on marketing investment (ROMI), is a way of calculating the profits gained or benefits of conducting a marketing campaign. You can calculate the ROI for a specific campaign, such as a campaign promoting a new menu item or for your restaurant’s overall marketing efforts.

Why Should You Calculate Your Marketing ROI?

There are many benefits to calculating your marketing ROI, but here are a few major reasons.

  • Marketing ROI helps justify your marketing budget.
  • It can help you discover what marketing tactics are effective and which ones aren't successful.
  • Analyzing your ROI can help you optimize your marketing efforts further down the road.

Additionally, if you’re utilizing social media as part of your marketing strategy, you can compare your progress and effectiveness to that of your competitors.

How Do You Calculate Marketing ROI?

There are many different ways that you can calculate your marketing ROI. Here’s how you can find your MROI in four simple steps.

  1. First, find your restaurant's sales growth during the period that you were running your marketing campaign.
  2. Calculate the total marketing investment you made. This can include things like ad buys in the local paper, purchasing an outdoor sign, hiring an advertising agency, or even paying one of your employees to manage your social media pages.
  3. Subtract the total marketing investment from your sales growth.
  4. Divide that number by the total marketing investment to find your marketing ROI.

If you multiply that number by 100, you can see your ROMI as a percentage.

What Is a Good Marketing ROI?

The higher your marketing ROI number is, the better. If you’re looking at your ROI as a percentage, then 200% would mean you broke even and anything above that would be a success. While anything above 200% is good, you should aim for at least a 500% MROI or above.

But, marketing campaigns can benefit your business in ways that don’t always result in direct increase in sales and, as a result, are harder to track. Here are three examples of benefits of marketing campaigns that are difficult to log in your MROI.

  • Your online advertising campaign could increase traffic to your restaurant’s website and increase your brand recognition.
  • A coupon marketing campaign could encourage one-time customers to become repeat visitors.
  • If you’re using social media marketing, you may see an increase in your follower count or likes on your posts.

Adjusting Your Marketing Tactics Based on Your Marketing ROI

Once you’ve calculated your restaurant’s marketing ROI, there are many ways that you can use that data to gauge the effectiveness of your marketing campaign. This will allow you to decide if you want to conduct another marketing campaign, change your tactics, or focus on one particularly effective strategy.

If you find that you have a low marketing ROI, you may also want to consider scaling back and lowering your marketing expenses, at least until you can find a more effective strategy.

Finding your marketing ROI is a great way to gauge the effectiveness of your restaurant’s marketing, but it’s important to remember that marketing does not just affect your business’s bottom line. So, be sure to check your website’s analytics, your social media following, and other important metrics before drastically changing your marketing strategy.

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