Before You Hire: How to Measure Marketing ROI

Measure marketing ROI by comparing the extra profit your marketing produces with its full cost, rather than judging clicks or revenue alone. Before you hire, connect each enquiry's source, the cost of generating it and the resulting sale in records your marketing lead, sales team and finance team can reconcile.

What return should you measure before hiring?

Use the profit left after supplying the additional sales and paying for the marketing that generated them. Revenue gives you the starting point, but it doesn't tell you what the business keeps.

I'd use contribution profit for this decision because it accounts for the direct costs of supplying what you've sold. Ask finance to agree which delivery costs belong in that calculation, then keep the definition consistent.

The working formula is:

ROI (%) = ((Additional revenue − direct delivery costs − marketing costs) ÷ marketing costs) × 100

Include the costs of the activity you're assessing: paid media, agency fees, production, software and the agreed share of staff costs. A return calculated from the advertising bill alone answers a narrower question.

Google Ads' target ROAS documentation describes a return based on conversion value relative to advertising spend. If that value represents revenue, the calculation hasn't deducted delivery costs or the rest of your marketing bill.

For marketing ROI, agree the profit definition and cost boundary before comparing results. Otherwise, two reports can use the same sales figures and reach different answers because they've counted different expenses.

Don't charge the whole business overhead bill to one campaign. Ask finance to make any allocation explicit, so the person you're hiring can see what they're being judged against.

Which source, cost and revenue fields do you need?

You need a traceable record from enquiry to sale, plus a separate record of the costs incurred. Start with fields your team can maintain rather than collecting detail nobody will check.

Use a shared enquiry or opportunity identifier to connect the CRM record with the eventual invoice. Keep the recorded source and the customer's explanation of how they found you in separate fields.

Record	Fields to capture	What it lets you check
Enquiry	Enquiry ID, arrival date, recorded source, campaign where known	Which activity is associated with incoming demand
Customer account	Customer ID, new or existing customer	Acquisition versus repeat business
Customer's explanation	Self-reported source, captured in their own words	Sources your tracking may have missed
Sales handling	Person responsible, first follow-up date, qualification status	What happened after the enquiry arrived
Opportunity	Opportunity ID, stage, expected value, expected close date	Pipeline still waiting for a decision
Completed sale	Linked opportunity ID, sale date, recognised revenue, credits or cancellations	Revenue that finance can confirm
Delivery	Direct costs or an agreed contribution margin	Profit available before marketing costs
Marketing cost	Period, activity, supplier or staff allocation, amount	The full cost of the work under review

These fields make marketing ROI reviewable across marketing, sales and finance. They also let you challenge a weak result without assuming the source of the enquiry was the problem.

I'd give finance responsibility for reconciling completed sales because a CRM's deal value shouldn't become revenue simply by appearing in a report. Let marketing own source capture and let sales own follow-up records, with one person responsible for resolving gaps.

How do you calculate marketing ROI from those records?

Subtract delivery costs and marketing costs from the additional revenue, then divide the remaining profit by the marketing cost. Keep the period and the group of enquiries consistent throughout.

Take one hypothetical example. Assume an activity costs £20,000 in total and produces £100,000 of additional revenue, with £60,000 in direct delivery costs. These are illustrative figures, not a client result, and the assumption that the revenue is additional matters.

Calculation	Amount
Additional revenue	£100,000
Direct delivery costs	£60,000
Contribution before marketing costs	£40,000
Full marketing cost	£20,000
Profit remaining after marketing	£20,000
ROI	100%

The activity returns £20,000 of profit after its marketing cost. Dividing that by the £20,000 investment gives a 100% return.

The revenue-to-marketing-cost ratio is 5:1, but that ratio doesn't describe the profit retained. I'd resist celebrating it on its own because the delivery bill still has to be paid (I wouldn't give myself a bonus for that).

This is a marketing ROI calculation only to the extent that the revenue is genuinely additional. If you've merely linked sales to a campaign, label the result an attributed return estimate. The arithmetic can be correct while the claim about what caused the sales remains uncertain.

How much confidence should you put in attribution?

Treat attribution as evidence about recorded sources and customer touchpoints, with limits on what it proves about additional sales. A customer touching a campaign doesn't establish that they would otherwise have bought nothing.

Google Analytics describes attribution as assigning credit to ads, clicks and other factors along a user's path to a conversion. That explains what the model is doing: distributing credit according to its rules.

Keep the model name alongside any attributed revenue figure. If you change the model, mark the change in the report rather than presenting the new allocation as improved business performance.

For marketing ROI, the harder issue is the counterfactual: what would have happened without the activity? I can't tell you that from a CRM export alone. Where practical, I'd consider a planned holdout or comparison group because it gives you something more useful than credit allocation to assess.

Ask whoever designs that comparison to account for existing demand, seasonality and differences between the groups. If a credible comparison isn't feasible, report the attributed return with that limitation attached.

Retain an unknown-source category (unknown is a useful answer). Don't distribute those sales across channels simply to make the report look complete. Show how much revenue remains unattributed and decide whether improving capture is worth the team's time.

How do you establish a fair baseline before the hire starts?

Build the baseline from reconciled records, agreed definitions and enquiries that have had time to become sales. The new hire should inherit a clear starting point, including the gaps you haven't resolved.

1. Choose the activity and decision you're assessing. Separate the return on current marketing from the additional return needed to fund a proposed hire.
2. Agree revenue, delivery-cost and marketing-cost definitions with finance. Record how shared staff time and software costs will be allocated.
3. Connect enquiries to opportunities and completed sales. Check a sample against invoices and record missing sources without guessing them.
4. Separate enquiries still progressing from those with completed outcomes. Follow each group through your actual sales cycle rather than comparing this month's costs only with this month's invoices.
5. Record the baseline and its limitations. Include follow-up handling, unresolved records and any changes in pricing or delivery costs that affect the comparison.

I'd keep the first version small because an elaborate report that nobody reconciles gives you more places to hide mistakes. Use the CRM, finance records and a shared spreadsheet if they can support the checks.

The baseline makes marketing ROI a fairer part of the hiring brief. It also gives the candidate a chance to challenge the assumptions before accepting responsibility for improving the result.

What does the baseline tell you about the person you need?

It tells you which work needs ownership and where the evidence is too weak to judge performance. It won't choose a job title for you, but it should make the responsibilities clearer.

If qualified enquiries reach the sales team but follow-ups are inconsistent, investigate that handover before assigning the whole problem to marketing. If the sales records reconcile but nobody owns campaign choices, budgets or execution, a marketing leader may be the right appointment.

If your agency's work is producing profitable sales within an agreed remit, keeping the agency may also be the right decision. Hiring internally can still make sense, but assess the work you need covered rather than treating either arrangement as inherently better.

Our guide to what to put in place before you hire a marketing director covers the wider responsibilities and access the person will need. Use this profit baseline alongside that preparation.

A weak marketing ROI figure tells you to investigate. It doesn't, by itself, tell you to replace the agency, buy software or create a senior role.

If the evidence points to a permanent leadership need and you've got functioning records and follow-ups, skip us and hire the leader. If the uncertainty starts earlier, our guide to why marketing spend is not generating leads examines the enquiry and follow-up work before you add more spending.

How should you judge the hire once they're in?

Judge the hire against an agreed scope, a documented baseline and results that have had time to develop. Separate changes they control from pricing, sales handling and delivery decisions owned elsewhere.

Before they start, ask finance to calculate the additional contribution needed to cover the full employment cost and any extra spending in the plan. Divide that combined cost by the agreed contribution margin to establish the additional revenue required to break even.

Don't count the same salary twice. If it's already included in the marketing cost allocation, it shouldn't appear again as a separate deduction.

In early reviews, check that source records, follow-ups and completed sales are being reconciled. Review changes to qualified enquiries and pipeline alongside the eventual profit outcome, without assigning a profit value to an enquiry that hasn't converted.

I'd agree review dates around your sales cycle because an arbitrary monthly verdict can judge unfinished work. Use marketing ROI once the relevant sales have matured, and keep earlier operational measures visible without pretending they're profit.

Record changes to spending, prices and the sales process alongside the results. Keep the definitions stable so you can distinguish a better return from a different calculation.

What else should you decide before reviewing returns?

Should VAT go into the calculation?

Ask finance to set the VAT treatment for both revenue and costs, including any amounts the business can't recover. Use that basis consistently across every activity, rather than mixing figures copied from different reports.

Can you count repeat purchases?

Include realised repeat purchases when they're within the agreed scope and observation period. Keep them separate from forecast future purchases, and agree how you'll avoid giving several activities credit for the same profit. A forecast can support a hiring decision, but label it as a forecast.

How should you assess brand activity?

Agree what evidence you'd accept before commissioning the work, such as changes in direct enquiries or customer-reported awareness. Keep those measures alongside the profit report without automatically converting them into sales value. I wouldn't force every brand activity into an immediate marketing ROI claim because the calculation needs evidence of additional profit.

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