How to Measure ROI on Digital Marketing - A Simple Guide for Kiwi Small Business Owners...

Measuring ROI (return on investment) tells you whether your marketing is making money or wasting it. Here’s an easy way to do that without the tech jargon.

What ROI means, simply

ROI = (Money you earn from marketing – Money you spent on marketing) ÷ Money you spent on marketing

If you spend $100 and get $300 in sales from that marketing, your ROI is (300–100) ÷ 100 = 2 → 200%.

Step 1 — Decide what “winning” looks like

Pick one clear goal:

- More online sales

- More leads (calls, emails, sign-ups)

- More people visiting your shop

Step 2 — Know what a customer is worth

- If customers usually spend $80 per purchase, that’s your average order value.

- If they come back and spend another $160 over time, your lifetime value might be $240.

Use the simple value that matters for your goal.

Step 3 — Track what you spend

Include ad spend, fees for people who help you, and any tools you pay for. Even small costs matter.

Step 4 — Keep track of where customers come from

- Ask customers “How did you hear about us?”

- Use special discount codes or links for each campaign

- Use Google Analytics or Facebook Insights if someone can help you set them up

Step 5 — Simple attribution (who gets the credit)

Often the last thing a customer clicked gets the credit — that’s okay to start with. Later you can look at the whole journey if you want more accuracy.

Step 6 — Calculate basic numbers

- CAC (Customer Acquisition Cost) = Total marketing cost ÷ Number of new customers

- ROI (%) = (Revenue from marketing – Cost) ÷ Cost × 100

Example:

You spend $1,000 on ads, get 25 new customers, each spends $80 = $2,000 revenue.

CAC = $1,000 ÷ 25 = $40

ROI = (2,000–1,000) ÷ 1,000 × 100 = 100%

Step 7 — Compare value vs cost

A useful rule: ideally each customer should bring in around 3 times what it costs to get them. If that’s not happening, rethink the campaign.

Step 8 — Test to learn what works

Try small experiments:

- Run a small ad in one area and not in another, see which sells better

- Try two different ads and see which gets more enquiries

This tells you what actually causes sales.

Practical, low-tech ways for NZ small businesses

- Use different discount codes for each ad or leaflet to see what works

- Ask customers at checkout where they heard about you

- Use simple spreadsheets to record campaign, cost and sales

- Report in NZD and remember busy times like school holidays or EOFY

Common mistakes to avoid

- Only looking at clicks or likes (don’t equal sales)

- Ignoring repeat customers (they add value)

- Forgetting to count all costs

Quick checklist

- Pick one clear goal

- Work out how much a customer is worth

- Track every campaign cost

- Use codes or ask customers how they found you

- Calculate CAC and ROI

- Run small tests and keep what works