How to Track Marketing ROI Without a Point-of-Sale System or Perfect Data

NOTE: This blog is a transcript from a podcast and therefore may contain errors.

Shannon Allen: Welcome to Digital Marketing ROI. I’m your host, Shannon Allen, and I’m joined today by my favorite of all times, Krystal Vivian. How’s it going?

Krystal Vivian: It’s going great, Shannon. How are you doing?

Shannon Allen: It’s good. I wish we were in person and we could be cheering to drinking our pumpkin spice latte today as, as I like to say, sweater weather.

Sweater weather. It’s sweater weather.

Krystal Vivian: Sweater weather. I love that SNL sketch. That’s such a good one. So no, I am fully in my crew neck. I’ve got… I had pumpkin spice iced coffee-

Shannon Allen: Me too … ’cause I’m

Krystal Vivian: a year-round iced coffee girl. So I had my pumpkin spice iced coffee today, and it was very good

Shannon Allen: Well, I’ve been making it at home, so I don’t go out and spend it.

I do live like a good sweater weather, and I was somewhere recently, and it was super hot a couple weeks ago, and I said to a friend of mine, “Man, I wish it was sweater weather.” And she’s like, “What are you saying? What do you mean?” I’m like, “Saturday Night Live.

Come on.”

Krystal Vivian: Oh my gosh, it’s so good. There’s a pair of content creators that I like a lot, this time of year, they always post the same reel that they did a couple years ago of them wearing different matching fall sweaters-

and then it’s to that audio, and I love it. Super fun.

Shannon Allen: Yeah. Well, then I continued on as I was retelling the story, I think actually to Lisa, was I had to then tell some of my favorite Saturday Night Live skits that, you know, the- Oh

Krystal Vivian: my gosh, we could do a whole podcast episode about that.

 

Shannon Allen: can do a whole podcast on just Saturday Night Live skits that are my favorites.

Krystal Vivian: Yeah.

Shannon Allen: Has nothing to do with digital marketing, but we could make it work.

Krystal Vivian: Well, you know what, the thing about Saturday Night Live skits is that the ones that work capture your attention because they surprise you, they delight you, they make you feel-

strong emotional reaction, and they have a really compelling story, and- that is content marketing, baby … there

Shannon Allen: you go. I knew we could tie it back. All right. Let’s think of that for future. Let’s add it to our 2027 blog content.

Krystal Vivian: I will, absolutely. it’s on the list.

Shannon Allen: All right. Well, today’s episode is kind of really the heart of our show, right? The name says it all, ROI, return on investment. So as we are, rounding into renewal season with end of the year, the next podcast that we’re gonna kick off in October will be very budget specific. but what we’ve been living in is, as we start to work on renewals, is we really walk through how do we take the digital marketing that all of our clients do with us and tie it back to return on investment, right?

Krystal Vivian: Yeah.

Shannon Allen: So really today’s a little bit about the math problem, but things that I want business owners and our clients specifically to be thinking about, right? Because ROI isn’t something your marketing partner can do alone. You need to be in this together, and we are held to certain expectations that we can’t do without our partners feeding some of the information back to us, right?

Krystal Vivian: Correct. Well, ’cause you need the marketing data, but then also the sales data, and if-

Shannon Allen: Yes …

Krystal Vivian: if you wanna get a full picture of your ROI, you have to have those two elements together. It’s the full calculation.

Shannon Allen: Yes, and it’s understanding what products and services you sell, and how you value them, and how you rate them, it really does come back to your profit and loss, like how are you recording it? And there is no perfect math. We can at least get as close as perfect as we can by making some very good assumptions, and that’s what we’re gonna talk about today.

Krystal Vivian: Well, I’d like to start off by going a little bit broad.

Everybody says that they want ROI, and we hear it all the time, but why is it so hard to actually get there?

Shannon Allen: wonderful question to start off, because everyone thinks they’re measuring ROI. most aren’t, and most don’t actually have any idea unfortunately, because they’re looking at it from different perspectives.

They’re looking at their profit and loss statement of what they do internally, measuring expenses, measuring this, measuring that, but they don’t include marketing in there, our company included. You know, it’s budget season, I am not sitting down measuring everything that way to do my budget. But couple stats here that I think were really interesting.

So 85% of marketers say that they’re extremely or very confident that they can measure holistic ROI. Now, I think that is a really funny number to start off with, because that’s a big number, that they are confident they can measure holistic ROI, but only 32% actually do it.

Krystal Vivian: That sounds right.

Shannon Allen: Yeah. Yeah. So, I mean, some of these numbers, that’s crazy to think about is if, you know, 85%, which is, you know, only 15% shy of 100%, but only 32% are doing it, so that’s crazy. 64% of companies base future marketing budgets on documented

Krystal Vivian: ROI. Mm.

Shannon Allen: And 87% say data-driven marketing is critical, but only 32% trust their data.

Krystal Vivian: Why do you think that is?

Shannon Allen: You know, because data are numbers, but it’s still not a black and white consumer path, right? So we know in marketing, based on digital specific, that there is no black and white, I know that Joe Smith took this action in his digital marketing, ended up here, ended up there, filled out an application and bought from you.

There are some things we can measure and some things we can compare, but that’s tying everything to CRMs, you have to have point-of-sale systems, all of that to really truly take that path all the way. it’s also why, and, we’re gonna go deeper into 2027, but it’s why we are now developing our own intelligence platform, that’s called Journey One, because we are trying to help our clients with this ROI conversation as best as we possibly can as we follow the consumer journey.

So, I mean, ultimately that’s a really laid back answer. Why is it important? Well, because everything should be measured on it. Like, there are certain things that we do that you can’t measure that are still really valuable. I think of social media management as one of those, right? ‘Cause it’s a service we provide as opposed to advertising.

this is something that’s really important to be clear about. To measure true ROI, you have to compare marketing that you can track, which is advertising, versus services you pay for, right? You have to pay for a hosting fee for your website, so there’s another place for your company to live, right?

It’s the second location, so to speak. But you have to pay for it. That doesn’t necessarily mean that you can track ROI to it other than visitors come there. We don’t know what they did once they get there always, right? So there’s services you pay for, We know social media management’s really valuable.

We know that people pay for things that they have to do that you can’t always measure, but there’s value that you can bring to it, right?

Krystal Vivian: Correct.

Shannon Allen: So that’s a very simple answer of, you know, everybody says they want it. Why is it so hard to get there? There are people that work in black and white worlds, and those are the ones that should have point of sale systems because that’s as black and white as I can be, is to know who came where, what they did, and what their next steps are.

In digital marketing, I have a better chance of somebody that’s buying a billboard, but you also have people out there all day long buying billboards, listening to radio, watching something on a linear TV station that there is no trackability but you still believe in it. And it could be- ’cause one person walked in the street and said, “I saw your billboard.”

Mm-hmm. “I heard you on the radio. I did this.” That is huge value. It’s still not a return on investment.

Krystal Vivian: Well, and it’s also that’s what they remember seeing, but they also were most likely touched by so many other ads or social media content. I always think of, like, search engine marketing. SEM is, is one of the best ways for us to drive traffic and drive leads to a client’s website, but people when they go and schedule that appointment, somebody is not gonna say, “Oh, well I saw your paid Google ad.”

They’re gonna say, “Oh, well I heard you on B100,” ’cause they, to the consumer, they don’t think, “Oh, I’m clicking on this ad, and that’s how I got to you.” Yeah.

Shannon Allen: Exactly. So that, we know it’s important, and, over a year ago we really realized we needed to stop… we do tend to go very granular in our reporting because we wanna understand the data as best as possible. But in order to really track it back to ROI, you have to first go deep and then pull back, right?

And then measure it. And so that is really what is how we kind of like started to change the wheel.

Krystal Vivian: Yes. So let’s walk us through it. How do we calculate ROI for a client?

Shannon Allen: So if you Googled right now or went to Claude or went to Chat and said, “How do I measure marketing?

What’s a good ROI calculation?” It’s gonna give you a basic formula. It’s gonna say your revenue from marketing minus your spend, divided by marketing cost, times 100, right? They’re gonna give you a basic formula. Sounds really great, but there’s a lot of missing pieces in here. So when I think about how do we measure it, I have to know my job in digital, my number one job, and we call it lead generation, we call it branding, everything we’re doing.

Lead generation is a misconception. When I tell somebody we’re doing lead generation, it means I’m bringing people to your website that will lead to consumers taking an action. That’s lead generation. If you talk to a car dealer, they’re gonna speak in the term of leads. True lead means I know your name , address, phone number, and email address.

My job in digital marketing, and any agency out there, their job is to bring you sales. But ultimately, our job is to land them on your website as total action steps, right? And an action can be a click, it can be a website view-through, somebody saw the ad but came back in 30 days. It can even be a physical visit we can track, right?

It can be a secondary action. All of those are what we calculate first. So first thing we do is identify with all your solutions, what are the total actions that we bring between your website and your physical building, right? We start there. From there, we need a conversion rate. Most clients do not know their conversion, and that’s typical.

Unless you’re, again, a point-of-sale system. A point-of-sale system is gonna know who came, put something in the cart, and how many of those people then became true sales. That’s easy, but when you don’t have a point of sale or a cart to drop it in, then we have to get an estimate. When somebody comes to your website, how many of those website visits or total actions to the website converted, right?

Call, form fill, appointment, email, whatever that turns into what we would consider now a lead, Some kind of action step. From that point, we have to take what that percentage is and then figure out of that group of people now, how many of those actually bought.

Krystal Vivian: Mm-hmm.

Shannon Allen: Actually closed the sale.

So you have two kind of conversions you’re figuring out. So you can take the average of those two and then have an overall conversion, so you have your website conversion also times the closed sale. The best you can do is do an assumption, and so one of the things that we do is we just look at national rates and say, “If I am this industry,” okay, and I’m gonna use a credit union example.

If I’m a credit union and I am marketing auto loans, what is an average website conversion? What is an average, conversion that, that turns to sale? And then I get an average, right? Mm-hmm. From there, I can actually take those numbers and figure my total actions times that overall conversion. And then what’s the missing piece?

I know if 1,000 people did this and it was a 6% website conversion, that’s 60 leads times a close ratio, that’s 21 sales, right? Now I need to know how much is that-

Krystal Vivian: How many loans.

Shannon Allen: Yeah. Yes, how many loans. And, or if it’s a tire place, I need to know how much is an average sale in tires.

Mm-hmm. And again, I don’t need to know your net profit. I need to know your gross, ’cause we’re dealing in gross numbers. Your expenses is a P&L. Your expense is not the same for me. I’m looking at lifetime values or per action, you know, year one profitability, right? I have to start somewhere.

So now I have my leads times my close ratio times that average. Let’s say it’s tires. An average tire would be $700. So if we got 21 sales out of those thousand clicks to the tire company, times 700, that’s $14,700 in revenue. and you spent X amount of dollars. If that campaign cost you X amount, let’s say it’s 3,000, then we have a pretty good ROI.

So I know that’s a lot of math that I’m talking about, but what we need is we need to always know total actions, we need to see an overall conversion rate, we need to know either your actuals of what’s closed or at least, what we’re gonna decide you were gonna get credit for, and we need values.

We need the values that you use of what everything is. So that seems a little bit overwhelming, but we walk everybody through it as best as we can. But it is logical to think about. All those things can equal a return on investment, and it’s the best way we can look at, as we said in the very first question, that would be a very holistic view, and I would say we go as conservative as possible so that we know it’s, the…

At the least amount, we’re hoping we are bringing this much return on investment.

Krystal Vivian: Mm-hmm. Does

Shannon Allen: that, does that make sense or did I overcomplicate it?

Krystal Vivian: Yes, that made perfect sense. Okay. I think it was pretty clear. Even though it’s a lot of math, I think it’s very clear of, like, okay, this is what you need, this is how we calculate it. Yeah. And the hardest part for a business owner is really to just find out their numbers.

Like, a lot of business owners don’t know their close rate. They don’t wanna share sales numbers. How do we calculate ROI in those cases?

let me say this one more time before I go to the next question. I kinda had that aha moment where it’s like, basically if you’re a business owner, I want you to think to yourself, how many people or consumers did we bring to you on the consumer journey?

How many of those people raised their hand- and showed interest? And then how many of those people actually bought? And then finally, what’s the sale worth?

Mm-hmm.

Shannon Allen: And from that, all you have to do is multiply that through, compare it to what you spent, and then we’re gonna know if we’re on the right path.

 

Krystal Vivian: Yes, I think so.

Shannon Allen: Okay. So ask me the question again.

Krystal Vivian: If business owners don’t know their close rate or they don’t want to share their sales numbers, how do we calculate ROI in those cases?

Shannon Allen: We have three ways to get there, right? We have hard numbers. The client gives us units sold. They give us loan values. They give us, their sales number exactly, right? That’s the cleanest ROI we have. But even with those hard numbers, we still need benchmarks, right? So this is where the research comes in, and from there we can research and give average product values, right?

We can give them average conversion rates and close rates for their industry, and then we can go deeper and look in the Michigan or the Indiana market or the Ohio market, right, and look at all those things. But then my favorite thing to do is to review that with the client, and we all agree A, B, and C makes sense for us, right?

And then there also is a hybrid version between those. We can do the client gives us part of it, right? They’re giving us their actuals. We fill the gap in with benchmarks as close- Mm … as we can. Every now and then there’s that client that just knows their numbers. The car dealer to me is probably one of the easiest ones I can do because if they share with me their units sold, they know how much value is in something, ’cause they already have a pack already built into it.

some of the industries out there that we work with have those numbers at hand. But, credit unions would be a great one that I could explain that we’d all be surprised that they don’t always know their values, because there’s many different ways to measure it. And then if you think of it this way, if you’re a credit union, lifetime value is much more valuable than year one, because don’t we all kind of lose money on year one sometimes, right?

So it’s more valuable to use probably that lifetime number. The first time I ever got in with a credit union was because I wanted to have my mortgage there. My checking account wasn’t there, but the way they got me to become a member is to get this great loan for my mortgage, I needed to be a member, and then I ended up moving everything over.

So the lifetime value wasn’t just that of the mortgage, it was the fact that now I have a HELOC with them, that, you know, I have a savings account, that I’ve, I bought different CDs from them, right? My lifetime value grew, and it all came in first from a mortgage.

Krystal Vivian: Mm-hmm.

Shannon Allen: So the best way if nobody’s sharing is we’re gonna give everybody assumptions, and what I would say and recommend to clients out there and business owners is start to think of those things.

Do the research yourself. Don’t wait till your marketing person brings it to you. You do your research, and then you start creating your benchmarks. And what I can tell you is usually those benchmarks continue to move and evolve, and you know which ones you wanna focus on as well. So if you’re driving marketing off of one product but it’s not your highest profit margin, then why are we doing that, right?

Yeah. So not only will these numbers and this research help you, it will also help you with strategy in your marketing. it’s why I ask the question to every client, when I first meet them, “Give me your, everything you do in order of priority, and then give it to me in order of profitability, and is it the same?”

Mm. So membership in a bank might be a high priority, but it might not be their profitability

Krystal Vivian: so let’s go a little bit deeper on what you’re talking about, and let’s expand on it.

Shannon Allen: Know your profit margin, Right? Know those order, those three orders of priority that I just gave, because that’s going to focus you.

You know, we take that along with a priority for next year, and work with people as we look at renewals. Because their profitability might not be really high in credit cards, or it might not… If you’re a tire company, it might not be high in oil changes, but it’s the entry level, and so we’re gonna focus on that because then we can sell them other things and do auto repair, right?

So knowing and looking at all of your products and services, and just putting them in a priority order and a profitability order, whether that’s internally or something that you wanna do for a marketing plan, right? and again, assign those lifetime values. Understand your profit margins. So it’s kinda like taking your profit and loss statements and really assigning it, and you gotta look at your expenses as well.

But for us as marketers, we’re not gonna back out your expenses when we’re figuring ROI. that’s your job to make sure it’s priced accordingly so that you are competitive. That’s not our job. So a business owner needs to know that when we talk about marketing, we are not talking about gross or net.

We are talking about you give us what you charge somebody, not your profitability same. Does that make sense? So profit is important for a business owner to know, but when it comes to marketing, the fact that you’re most profitable could be because you have your best profit margin in there, or it could be it’s just a high-ticket number, right?

Krystal Vivian: Are you going always by profitability, when you’re choosing what to prioritize for marketing?

Shannon Allen: I like both questions. It’s why a business owner needs to tell me the top three of priority, and then the top three in profitability.

And if there’s some that match, that’s a given. That matches. It’s a top priority for, tires to be sold, and it’s a profitability. Oil change is one of those that doesn’t hit on your profitability list, but it absolutely hits on your priority list, and then we make that decision from a strategy standpoint.

Krystal Vivian: Mm-hmm.

Shannon Allen: So that to me is the best way to do it, is if you look at both, and then we decide as a strategy, and it can change and evolve, right? We can be very proactive with it and have that be the main strategy, but then you might have something, a bank might have something going on where they really need to focus on credit cards this month.

And even their profitability isn’t as big as maybe the profit in a mortgage or high as a number. It’s a priority because it’s what everybody’s talking about right now, or a personal loan. They need a personal loan right now, so it also, all of a sudden the priority overtakes the profitability

Krystal Vivian: Yes, that makes sense.

Shannon Allen: So I honestly think this is really that part of the business, this question, is that business owners don’t always take the time to analyze it and connect it to their marketing. They’ll connect it to their profit and loss and what they’re doing in their budgets, but they don’t go that next step into marketing.

That’s the way I think about it

Krystal Vivian: But truly, to get people to come into your bank or your credit union, your location, or to become a paying client, it’s the best way to reach them. How does knowing your ROI actually make your marketing better?

Shannon Allen: there’s so many ways I could answer that, but I’m gonna answer it with a statistic, ’cause you know I like to lead with that.

Krystal Vivian: Mm-hmm.

Shannon Allen: Companies using data-driven attribution will see an ROI improve 15 to 20%.

Krystal Vivian: Wow.

Shannon Allen: So knowing what your data’s driving, how it’s attributed, will improve your profit margin. Because if you think about it, we’re breaking it all down, right? What does ROI let us do? it moves money to what’s working.

It will fix or cut what’s not.

Krystal Vivian: Yep.

Shannon Allen: We can defend our budget with real numbers. Mm-hmm. And then we can plan the strategy next year based on facts, not just feelings, or not just- Mm-hmm … this is ’cause we have always done it this way.

Krystal Vivian: Mm-hmm.

Shannon Allen: I would say the takeaways from that, I mean, this is us bringing it back to ROI, the whole conversation was about our topic of our podcast, right?

Yeah. The number one thing, the three takeaways is know your numbers, share your numbers, and really give campaigns enough time to work before you judge them. And it’s not an even keel. Like we had a credit union that substantially increased their budget from year before, right? And I’m talking like a 47% increase, and their actions increased by, you know, 13 to 15%, and they were expecting an even 50/50.

It’s not built that way, because there’s still so many missing factors of the mathematical equation, and one of that is they don’t share their numbers with us. So we moved everything up, focused on a new strategy. We know we grew people to the website. What we don’t know then, because you’re not sharing it with us, did we close more loans?

Did we close, bring in more members? Did we see a higher profitability? And it’s never gonna be f- the exact same number, because it doesn’t all happen in year one. Sometimes your profitability in a brand-new business doesn’t hit till year four or five.

Krystal Vivian: Well, part of that is because some people might be browsing or going to the website now, and then making a purchasing decision a month from now or six months from now, but also, it’s not just about the quantity of people that you’re reaching with your marketing when you increase your budget.

It’s about the quality of the strategy, and you’re building that- Exactly …

Shannon Allen: foundation.

Krystal Vivian: You’re reaching more qualified people. You’re showing up in more bottom funnel searches. You’re moving the right people more effectively through the consumer journey to become paying customers.

And so it might not show up in your actions, but it shows up in your revenue because you’re getting people who are buying, spending more money, they’re buying more. And maybe, like you said with the credit union, is they come in for a mortgage, but then they become a member, and then now they’re also getting a HELOC, and now they’re also getting their auto loan, and they’re buying CD- Exactly

and they’re taking out your credit card. And their lifetime value grows from there. So it’s not just about the quantity of people that you’re reaching, it’s about the quality, too.

Shannon Allen: And I said this to a client once, ROI isn’t your report card, your data is.

Mm-hmm. The ROI is a steering wheel, right? Mm-hmm. So when we know what this action is that turns into a lead and what it’s worth to you and how many of those turn into sales, then we can make smarter decisions every single month, right? We can put more into what’s working and take out what isn’t working.

So over time, digital marketing gets held to a standard of being very black and white, when again, ROI is the steering wheel to get us to the destination, right? To get us to the next part of it, and turn it, go left, go right. It’s why we are calling our ROI intelligence platform Journey One, because it is part of a journey.

And I kind of had the aha moment when I was talking to a credit union about this, is that the data is the report card, the ROI is the steering wheel, but if you don’t give us the directions, we don’t know where to go, right? Like, we know how to measure, but you’re, flying blind, right?

I’m driving, holding the steering wheel, and you’ve put a blindfold around me, and I can’t see where I’m going.

Krystal Vivian: 100%.

Shannon Allen: You like that?

Krystal Vivian: I love that. I think that’s a great analogy.

Shannon Allen: Yeah. All right, well, thank you, Krystal. Thanks for today, and thank you to our listeners for tuning in, and join us for our next episode of Digital Marketing ROI.

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