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  • Writer's pictureRebecca Hourihan

How to Calculate Your ROI on Marketing

There’s an old saying, “50% of marketing works. The trouble is, I don’t know which 50%.” Let’s unpack that and learn about your true return on investment.

To begin your calculations, you need to itemize where you are investing your marketing dollars. Below you will find a helpful list. As you go through it, jot down some ballpark annual numbers. You can always go back and fill in the specifics; but for now, a good annual estimate will allow you to see the effectiveness of your marketing activities.

*Some of this list will include pre-COVID activities, and that’s okay. One day we’ll return to normal, and these face-to-face events will resume.


Write down your annual investment in the following marketing areas:

Relationship Marketing

  • Client appreciation

  • Client meals

  • Client events

  • Center of Influence appreciation

  • Center of Influence meals

  • Center of Influence outings

  • Prospecting meals

  • Prospecting events

  • Charity sponsorship meals

  • Charity sponsorship events

  • Other activities:

Ballpark Annual Total: $______

Tangible Marketing

  • Business cards

  • Office refreshments

  • Signs

  • Brochures

  • Folders

  • Office equipment (iPads, laptops, paper, projectors, video equipment, etc.)

  • Other tangible marketing:

Ballpark Annual Total: $______

Content Marketing

  • Bulk email provider (Constant Contact, Mailchimp, HubSpot, etc.)

  • Newsletters

  • Webinars

  • Blog articles

  • Social media marketing

  • Digital ads

  • Best practice guides

  • Videos

  • Podcasts

  • Website updates

  • Other content marketing:

Ballpark Annual Total: $_______

Now, add them together.

Annual Total: $_______

Do these numbers surprise you? It’s probably more than you originally thought, which is normal. Most advisors find that they spend a lot of time and capital, especially with Relationship Marketing.

All New Introductions

Now that you have your totals, you need to think about your annual total number of prospect introductions. This number is a bit delicate. Every inbound request, referral and outbound response counts as a new introduction.

Annual total new introductions: _______

Average Revenue Per Client

The simplest way to find your average revenue per client is to take a straight-line average of your retirement plan business and divide it by the number of clients. Your average revenue is the first calibration point in learning investment vs. return.

Also, consider how long you generally keep your clients. Thankfully, retirement plan clients tend to be “sticky business”. Let’s be honest, you do an amazing job servicing your happy clients, so they tend to stay with you for years.

Average revenue per client: $______

Average client lifetime: ____years

Churn Ratio

It’s generally pretty rare to lose a client, but how many client transitions do you experience per year? Many times in our business, advisors will fill in a fractional number. For example, every two years, we lose about 1 client (or .5 clients per year).

Annual churn ratio: ______

Annual Revenue and Net Profit Margin Per Client

The last two numbers are annual revenue and net profit margin per client. Most advisors are able to calculate their annual retirement plan revenue per year and profitability rather quickly.

Wealth Management Client Growth

Now, if your business includes both retirement plans and wealth management, I’d like to challenge you to run these results a few times. Try to isolate for retirement plans, then wealth management, then both together, especially since some 401(k) clients might become wealth management clients and vice versa.

Annual revenue: $______

Net profit margin per client: ______ %

These are the critical numbers needed to perform your Return on Investment calculation. The reason why you want to run these numbers a few times is that your wealth management practice could benefit from access to retirement plan participants. It’s important to look at them together and not as separate silos.

Analyzing the Results

Now that you have your numbers, it’s time to qualify them.

  1. Open this spreadsheet >> Marketing ROI Calculator

  2. Fill in your numbers

  3. Calculate your results

For any marketing campaigns that return a 5 to 1 ratio, you’re doing incredibly well. That means that for every $1 invested in marketing, you receive $5 back in gross revenue.

If your number is lower, no worries. Take a look at your churn ratio. This number shows how quickly you are losing clients. So, look into your business and find ways to shore up relationships. Financial service clients are generally sticky business. This should be the low-hanging fruit you can glean. If you need some help, check out >> Breaking Down Your Sales Process

If your marketing ROI number is higher than 5, send a thank you note / gift to your marketing team. Thank them for their killer results. Ask them what else they would like to accomplish. Maybe give them more budget and a longer runway to grow your business because what they are doing is working.

Investing in Your Business

As a final takeaway, all marketing works as long as your returns are higher than 1 (every $1 invested returns $1 in gross revenue). Building up your marketing presence takes time, resources and commitment. Results don’t happen overnight. Have faith in the process, and very soon you’ll be smiling at your marketing campaigns as your investment is paying off with healthy ROI dividends.

Thanks for reading and Happy Marketing!

About Us

401(k) Marketing is the modern marketing agency for the retirement plan industry. We are proud to support our clients through custom engagements, content marketing campaigns, sales material innovations, thought-leadership consulting, interactive workshops and speaking events. Our mission is to empower the retirement plan industry with high-quality marketing, ultimately inspiring Americans to become financially prepared for their future.

Retirement Plan Marketing is the solution for retirement plan advisors looking to generate awareness, streamline sales opportunities and earn more 401(k) business. This comprehensive, strategy driven marketing program includes digital content and sales material specifically designed to help retirement plan professionals attract the right decision makers.


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