If your church currently spends money on any form church marketing or church advertising. Or is contemplating spending money on church marketing or church advertising,  you should become aware of a critical aspect of advertising and marketing – Measuring Return on Investment.

Please don’t think that because you are a “church” that you don’t need to focus on ROI.
Part of being good stewards of your finances is measuring the return you get on your investments, including church marketing and church advertising.

A. Return on Investment
Return on Investment (abbreviated ROI) is simply the value your church receives in return for the money it spends in a given advertising vehicle or campaign. As a church, you could measure that value several ways.
One philosophy many churches adopt is to view their advertising efforts as simply a way of sowing seed and increasing their name recognition and community profile. Certainly there is a value to that. However, it is not a measure we at Truth Advertising recommend you adopt.

B. Don’t Settle
You probably are aware that TA has its roots in the secular advertising and marketing arena. In fact, TA is a ministry that has grown out of a much larger publishing enterprise with various divisions of magazines and solo direct mail products. Our clients spend a lot of money with and they expect a rate of return that justifies those investments. In other words they compare the investment they give us to what we give to them in terms of new customers, repeat business, and overall dollars.

The church should be no different when it comes to investing its’ advertising dollars. You should demand it works in a clearly measurable manner. Unfortunately, a great number of churches we speak with have no idea how well their advertising and marketing works. Mostly, I believe this is because previous marketing efforts have been so unsuccessful and so unmemorable in terms of impact. Because of this, the church gets lulled into a mediocre mind set that causes them to expect little, if any tangible results. Your church can do better – don’t settle. Whether it is direct mail, newspaper ads, billboards, or cable television, you should demand you receive proper value for your advertising dollars.

Truth Advertising can help you unlock that value and teach you to measure how well you are spending your advertising budget.

C. How to measure Return on Investment?
In our minds, there is but one measure of success new visitors to your church. Yes, there may be residual benefits but listen, the fields are ripe and ready for harvest! There will always be people in your community ready to visit your church – saved and unsaved alike. You can count on the residual benefits of advertising but you need to also get the new visitors in your doors or you are squandering your dollars. Have I said this often enough yet?

D. How much response is enough?
So, what is a “good response” and how can I justify to my Church body an advertising investment? First of all, if your advertising leads to the direct salvation of just one person… how great is that? It would be hard to put a price on that wouldn’t it? Yet, I believe you can do better and want to show you how to cost justify a direct mail postcard – aside from the obvious spiritual value.

Here are the 3 formulas and “extra special kicker” you need to include in your analysis of a mailer’s success.

1. The Direct Response Ratio Formula
Example:
Your Church Mails 10,000 pieces – 30 new family units visit your church over a 3 week period of time. 30 (new units) divided by 10,000 (number of pieces mailed) 30/10000 =.003%. So the return on your investment would be .003% (many churches will do much better)

2. The Cost Per Lead Formula
Example:
Using the response rate of 30 new family units
Assume that the cost of your marketing campaign was $2100
30 new family units visited the church$ 2100 (the cost of your campaign) divided by 30 (new units) 2100/30 = 70 So the average cost for your church to bring in 1 new family unit was $70

3. The Residual Profit Ratio
Example:
Using the response of 30 new family units The cost of your marketing campaign was $2,100 You received 30 new family units as a result. Out of the 30 new units, 6 become a members of your church. Out of the 6 new units (using national church tithing estimates) you receive an average of $2000 per year per new family Your residual profit ratio would be $2000 x 6 = $12,000
Minus the cost of your marketing campaign of $2,100 would be a residual profit ratio of
$9,900

The Final “Extra Special Kicker”
Most churches miss this but along with your 6 new families, you also receive access to their circle of friends, neighbors, and relatives. This is huge! This alone can be a tremendous boost.

The #1 advertising source for your church (if you have a healthy church) should always be “word of mouth”. If these new people are happy, they will be bringing their friends.

These ways to measure ROI can be used for a variety of marketing campaigns. Once we begin to look a little more closely at the formulas, we begin to see just how effective or ineffective our marketing campaigns are. A .003% percent return on a marketing campaign may seem to some like a small return, but once we begin using the residual profit ratio, we can see how easy it is to “cost justify” a direct mail campaign.
By the same token, if your church is spending even just $300 a month on a little 2 x 2 box in the local newspaper, and you are getting zero new visitors, then your $300 is not being used in the most effective manner possible.

What’s important is that your church knows where it is spending its’ “evangelism
budget” and to know how effective each area is. The only way to determine this is to use the return on investment formulas.

We’d like to help you maximize your advertising dollars
and reach more people for Christ! Call us today!!