Marketing ROI Basics

Marketing ROI Basics: An Easy, Step-By-Step Guide for Small Businesses

Most small businesses waste money on marketing because they never think about the Marketing ROI Basics. So a question you should be asking is the only one that truly matters: What am I getting back?

Figuring out your Marketing ROI isn’t magic. It’s simple math. But if you don’t know the return on every dollar you spend, you’re not running a business–you’re gambling.

However, this guide walks you step-by-step through the basics so you can stop guessing. Then you can start tracking and make every marketing dollar pull its weight. Buckle up, buttercup, this is an easier ride than you may think.

Step 1: Understand the Marketing ROI Basics Formula

The math is simple:

ROI = (Revenue – Cost) ÷ Cost

If you spend $500 on marketing and generate $1,000 in sales, your ROI is 100%. Double your money.

But if you spend $500 and bring in $400? That’s a -20% ROI. You just contributed to the Marky-Mark Zuckerbucks “Screw Your Rights & Vacation” Fund.

The formula is simple.
Applying it consistently is where most small businesses drop the ball.

($1,500 – $500) ÷ $500 = 200%

Using the example above, do the math in the paranthesees first, then complete the rest

Step 2: Gather Your Numbers

You can’t calculate ROI without knowing what you spent and what you earned. But this is where 90% of most small business owners lose track. Because they either don’t know how to do this or don’t want to know.

Track Costs:

• Ad spend (Google, Meta, online/offline)
• Software subscriptions (CRM, email platform, tracking tools)
• Staff time (sales, admin, freelancers, contractors)

How to calculate CAC: (Ad spend + software + staff time) ÷ new customers
Example: ($500 + $297 + $150) ÷ 5 = $189.40 CAC

Track Revenue:

• Sales that are directly tied to the campaign
• Contracts or services closed
• Customer lifetime value (LTV)–repeat sales, upsells, referrals

How to calculate LTV: average order x purchases per year x years retained.
$500 x 12 x 3 = $18,000 LTV

Attribution 101:

How to tie revenue to a campaign:

• UTM links
• Unique call tracking numbers
• “How did you hear about us?” surveys
• Trigger links in email marketing
• Form tagging

See more in Marketing Attributions Basics.

Simple Example:

Let’s say “Joe’s HVAC” runs a $600 Facebook ad campaign for pre-heating-season tune-ups on furnaces.
They book 12 appointments at $150 each = $1,800 in revenue.
So ROI = ($1,800 – $600) ÷ $600 = 200% ROI.
But if Joe also signs two of those customers to annual service plans worth $1,000 each. Now his ROI jumps to ~633%!

👉 Without a system, this becomes an absolute spreadsheet nightmare. But with ROI Ninjas CRM, the costs and revenue tie directly to each campaign, so the math is done for you. Also, Joe doesn’t have to remember to upsell while he has his head in the furnace–he set up post-service review requests and the annual service plan.

Now the system upsells for him, his focus is on providing service, and his customers are happier than they ever have been.

Step 3: Calculate ROI for a Campaign

So here is where you put the formula to work.

Example 1: Without Systems

• $500 ad spend
• 50 leads generated
• Poor follow-up = 2 sales @ $200 = $400
• ROI = -20%

Example 2: With ROI Ninjas CRM

• $500 ad spend
• 50 leads generated
• Automated follow-up = 6 sales @ $200 = $1,200
• ROI = +140%

The math isn’t crazy here, and these are very conservative numbers. But the difference isn’t the ad platform. It’s whether you work the damn leads or not.

Want proof? Check out our case study on A Great Start Shooting School.
*Brooke realized more than 400% growth in revenue year-over-year.

Step 4: Avoid Common ROI Mistakes

Most small businesses fail at ROI tracking because they A) make it way more complicated than it is, and/or B) ignore the basics entirely. Here are the killers:

• Counting Vanity Metrics. Likes, shares, and followers don’t pay the bills. Closing deals and making sales will.
• Ignoring Lifetime Value. Those $200 sales could turn into $2,000 over 18 months of repeat purchases and referrals.
• Forgetting CAC (Customer Acquisition Cost). If you don’t know what it costs to win a customer, you cannot scale.
• Responding Too Slowly. If you wait hours or days, your leads are gone. ROI nose-dives and crashes into the ground.

One former client bragged about his Facebook business pages (he had six), having more than 10,000 followers. But when I asked how many came to his shows, he had no idea of an exact headcount. Additionally, he had no way of connecting ticket sales to marketing and advertising. He didn’t want it (cash-only, no record of sales).

That’s not marketing–it’s willful ignorance. And when you play stupid games with the IRS, sooner or later, you win stupid prizes. Just saying…

More bad choices to avoid are covered in Small Business Marketing Lies.

Step 5: Improve ROI Without Spending More

You don’t always need to pour more money into ads. Often, the fastest ROI boost comes from improving what happens after the click.

• Speed-to-Lead Playbook: Respond within 15 minutes or lose them.
• Follow-Up or Fail: Nurture every lead until they buy or die.
• Upsells & Repeat Sales: Increase lifetime value without extra ad spend.
• Customer Experience: Better service = more referrals = cheaper acquisition.
• Sales Funnels That Work: Simple is better. Simple + automation = way better!

Example:

This time, Joe has a gym and runs a 7-day trial campaign.
Each lead costs $15, and 10% convert to $50 memberships = $35 profit per customer.
Not great.
But when Joe’s Gym adds an ROI Ninjas CRM-powered automated check-ins, upgrade offers, referral rewards, and swag shop, conversions hit 25%.
Same ad spend, 2.5x ROI increase.

To learn more about how lifetime value changes the game, see our article, Profit-Based LTV.

Step 6: Put ROI Tracking on Autopilot

Spreadsheets are fine until you’re drowning in them. A CRM takes you from reactive to proactive

But with ROI Ninjas CRM, you can:

• Track leads from first click to close.
• Monitor CAC and LTV in real time.
• Automate follow-up and review requests.
• See exactly which campaigns are profitable.

You don’t have to be a math wizard. But you do need the right system.

Real-World Example:

A local contractor used to spend 5-6 hours every night reviewing orders, sending quotes and proposals, reconciling receipts, and checking invoices. After switching to ROI Ninjas CRM, he checks one dashboard, 15 minutes, done. He knows exactly what’s working, where his money is, and he’s spending more time with his family.

Knowing your Customer Acquisition Cost (CAC) is a great way to know how to get paid back faster. See Lower CAC = Faster Payback.

Marketing ROI Basics FAQs

Marketing ROI Basics: What’s Next?

Still guessing at ROI? Paying for clicks with no idea what’s coming back?

You don’t need the latest hack or more guru garbage. But you do need a system that works. Also, a system that shows you the numbers and automates the follow-up.

Here’s your next move:

You’ve wasted enough time and money guessing. So now is your time to know.

You’ve Seen the Math, Experience the Results.

ROI Ninjas CRM Simplifies Your Small Business