ROI (Return on Investment)
Did the money you spent on marketing make you more money back?
The Tradie Take
ROI is checking whether the new $2000 plumbing tool actually paid for itself. If it helped you finish jobs in half the time and you landed 3 extra jobs because of it, it was worth it. If it's sitting in your workshop gathering dust, it wasn't. Marketing works the same - if you spend $1000 on ads and get $3000 in jobs, that's a good ROI. If you get $200 in jobs, stop.
Definition
ROI (Return on Investment) measures the profit you generate compared to what you spent. For marketing, it answers the question: for every dollar I spend on ads or SEO, how many dollars do I get back in jobs? If you spend $1000 on Google Ads and those ads generate $5000 in jobs, your ROI is 5:1 (or 400%). Tracking ROI is the only way to know if your marketing is actually working.
How It Works
- 1 ROI = (Revenue from marketing - Cost of marketing) / Cost of marketing × 100
- 2 You need to track which jobs came from which marketing channel
- 3 Account for ALL costs: ad spend, agency fees, time spent, tools
- 4 A positive ROI means your marketing is profitable. Negative means you're losing money.
Tips for Tradies
- Track where every lead comes from - ask every caller "how did you find us?"
- Calculate ROI based on profit, not just revenue (a $5000 job with high material costs != $5000 profit)
- Give SEO and brand-building at least 6 months before judging ROI