How Does a Fractional CMO Help New York Businesses Maximize ROI?

According to the U.S. Small Business Administration, recent reports estimate there are 2.2 million small businesses in New York. That makes up 99.8% of all businesses, which reflects the state’s high popularity and potential for running a company.

However, starting and managing a business in New York City is far from cheap. You constantly shell out money to meet several objectives and retain customers over your competitors.

So, how do the top businesses do it?

They enlist the help of a New York City fractional CMO or fractional chief marketing officer to create a strategy aimed at taking home a high return on their investment or ROI.

Digital Authority Partners is a New York City digital marketing agency that can connect you with professional fractional CMOs waiting to refresh your business. They specialize in all things marketing, including budgeting and guaranteeing high returns on investment. In other words, they help you spend less and earn more!

This article discusses several ways New York City fractional CMOs help businesses succeed in the competitive Big Apple and global market, bringing clients the ROI they’re dreaming of. 

Here's Jason with the ins-and-outs of working with a fractional CMO in New York: 

What Does ROI Mean?

ROI, which stands for return on investment, measures the profitability of a certain investment.

It is the ratio between the profits to the total cost spent and can also be used to measure the profitability of a marketing campaign. Essentially, ROI looks at how much money you make in relation to how much you spend.

What Is the ROI Formula?

You can calculate ROI by dividing the net profit from the investment by the cost. Your profit is the difference between the current value and the cost of the investment.

• Here’s what the ROI formula looks like: ROI = (Net Profit / Cost of Investment) x 100

Let’s do an example together:

Suppose you invest $3000 in a video advertisement and another $3000 in product development for a total cost of $6000.

After one year, you generate $10,000 in revenue.

To find the ROI, start by determining your net profit, which is your revenue minus the total expenses. In this case, it is 10,000 - (3,000 + 3,000) = 4,000.

You have a net profit of $4,000. Divide this by the total costs, then multiply the result by 100.

• 4,000 / 6,000 = 0.667
• 0.667 x 100 = 66.7%

Therefore, the final ROI is 66.7%

This indicates that your investment has a positive ROI and that the campaign was successful and profitable. Generally, the higher the ROI, the better for the company.

If your ROI is greater than 100%, you generated more than your original investment. Otherwise, a negative ROI means you spent more than you earned.

Why is ROI Important?

Sometimes, businesses may spend too much on marketing (or another channel) and not generate enough profit, resulting in a negative ROI.

Determining your ROI is a crucial and practical way to keep your finances in check. Costs and profits are critical, objective information that helps you manage costs for future campaigns.

Take the example from earlier:

A 66.7% ROI is very telling of how well a campaign performed. One conclusion you could draw is your product is highly profitable, and it appeals to your target customers.

ROI also helps you determine areas for improvement in terms of budget. It allows you to look at all your expenses and see where you might have spent too much or not spent enough.

Given this new information, you can reshuffle your finances in ways that yield a positive ROI. It also gives you a clearer idea of where your business stands in terms of overall financial health.

4 Ways to Maximize ROI With New York FCMOs

The standard of ROI of fractional CMOs may vary, but you always want the ROI to be positive. 

Here are four helpful ways a New York City FCMO can help achieve optimal ROI:

1. Strategic Budget Planning

The best way to maximize ROI with New York FCMOs is to assess your current company’s budget. How much will you spend and in what areas?

In this stage, work with your New York City FCMO to break your marketing campaign into different parts and allocate amounts for each. Careful and strategic budget planning is the foundation of a successful and cost-effective marketing investment. With this foundation, a company is in a better position to maximize resources while reducing unnecessary costs.

To do this successfully, the FCMO looks at your business’s current financial situation. New businesses and startups may not have the same budget or resources as larger companies, which is why proper allocation is very important.

In addition, the FCMO aligns marketing plans with the company’s goals to ensure the company wastes no money in long-term planning too. One way to achieve this is to create KPIs and SMART goals to help guide business marketing efforts.

2. Low-Cost Marketing Strategies

Marketing has varying costs, and certain strategies may cost more than others, depending on the scale of the campaign and the company’s requirements.

When you have a highly competitive and expensive city like NYC, one of the best ways to save costs and maximize ROI is to implement affordable yet effective marketing strategies.

Better yet, some marketing strategies are free! For example, creating a social media account, posting promotional content, and interacting with followers is an affordable and effective way to spread awareness of your brand.

Encouraging customers to share their experiences with your brand won’t cost much either and can help your New York business gain visibility.

One cost-effective investment is through local SEO and content creation. Creating content for New York residents is essential in driving traffic to your website. It may take time, but it requires little to no cost. Plus, many SEO tools are either free or affordable and help you target the right local keywords.

Furthermore, you can use many free tools, like Google Analytics, to monitor your brand and track different metrics, including ROI. Another free tool is Google Business Profile, which gives your company a place on Google Maps for customers and Google to find and rank higher.

3. Consistent Performance Monitoring

After executing several marketing campaigns, now comes the nerve-wracking part of viewing the real-time results. This is your chance to see what methods are the most effective and cost-effective.

In this step, you must return to the KPIs and SMART goals you set before. Did you meet these objectives? Where did you fall short? Which method brought the best results? Analyzing your results helps determine your campaign’s strengths and weaknesses. 

With the help of different analytics tools, your team and your New York City FCMO can find areas to prioritize and improve. Furthermore, this step ensures that your decisions moving forward are objective and driven by data.

Some additional metrics are key in helping maximize ROI with New York FCMOs. These metrics are also just as important when determining the effectiveness of a campaign. These include:

• Conversion rate: Visitors who follow a predetermined, specific action (like making a purchase or signing up for an email newsletter).
• Customer lifetime value: How much customers are predicted to spend the whole time they engage with a company.
• Cost per acquisition: How much it costs a business to acquire one new customer

Conversion Rate: Defined

Not only do you want a customer to see your online ad, but you also want them to make a purchase. This is what the conversion rate measures: the percentage of customers who completed a desired action. 

Since money goes into promoting your business through display ads, you want to get your money’s worth by having customers click through AND take action. Taking action can refer to buying a product through an affiliate link or subscribing to a weekly newsletter. The higher the conversion rate, the better your ROI!

Customer Lifetime Value: Defined

Customer lifetime value measures the revenue a single customer generates over the entire time they spend with the business. A loyal customer base is always good for business. They are a constant source of revenue and keep the business sustained and competitive.

Securing a long-term customer means your marketing efforts have succeeded, contributing positively to your ROI.

Customer Acquisition Cost: Defined

Acquiring new customers comes with numerous costs as well, and as mentioned, you want to save on costs in as many areas as possible to maximize ROI.

Monitoring your customer acquisition cost allows the FCMO to develop cost-effective marketing plans, ensuring the least amount spent on acquiring new customers. A lower cost per acquisition means higher ROI for the business.

4. Target the Right Audience

Finding the right target audience is crucial to maximizing ROI. After all, these customers also directly affect your ROI. Here is where market research and customer segmentation come into play.

One of the FCMO’s areas of expertise is attracting the right audience through nuanced campaigns that resonate with the New York residents.

FCMOs also analyze people’s buying habits, pain points, and other patterns and trends that help narrow down the best target audience for your company. They segment them into different categories according to who is most likely to choose your brand.

The New York FCMO is responsible for ensuring your marketing efforts offer high-value services to the right people, which drives profit toward your business and increases overall ROI.

Hire a New York Fractional CMO With Digital Authority Partners

For new businesses, managing your marketing budget and achieving a positive ROI may seem like a tall order, so it may be smart to seek help from a New York City fractional CMO. With a NY FCMO's guidance and marketing tricks, you can save on marketing costs while executing strong campaigns that drive customers your way and achieve higher profits.

To learn more about how to maximize ROI with New York FCMOs, contact us today!