Food truck marketing is not an exact science, but over time it’s getting better. The biggest questions vendors have about their marketing campaigns is what their marketing ROI (return on investment) they are getting for the money they spend. In this article, we’ll look at a way to answer this question.

## How To Calculate Your Marketing ROI

One marketing mistake that many food trucks make is that they don’t analyze their data. They are spending money on a promotion because that’s what they’ve been told to do. Track the ROI so you know what’s really successful.

A key performance metric when evaluating your food truck marketing campaign is the marketing ROI. There are many misconceptions about how this metric is calculated. Some might think that if you spend \$1,000 on a campaign and it brings in \$10,000 in revenue, that they have gotten a \$9,000 ROI.

However, this method doesn’t account for things like the cost of goods, your food truck’s expenses and other overhead factors. You want to calculate your ROI based on gross profit on the product you are selling, not simply revenue.

#### Simple Formula For Calculating Your Food Truck Marketing ROI

(Gross Profit – Marketing Investment) / Marketing Investment

So if you assume your food truck makes a 30 percent profit margin, and your marketing campaign brings in \$10,000 in revenue you only have really made \$3,000. Your ROI is actually 200 percent:

(\$3,000 – \$1,000) / \$1,000

When things are tight, food trucks will often slash marketing budgets. Without proof that it works, marketing can easily be written off as unnecessary. This can be dangerous since good marketing improves revenue. Accurate marketing ROI measurements can help you identify which of your marketing expenses should be cut and which are driving business.

#### What is a Good Marketing ROI Ratio?

The revenue to marketing cost ratio represents how much money is generated for every dollar spent in marketing. For example, five dollars in sales for every one dollar spent in marketing yields a 5:1 ratio of revenue to cost.

A ratio over 5:1 is considered strong for most businesses, and a 10:1 ratio is exceptional. Achieving a ratio higher than 10:1 ratio is possible, but it shouldn’t be expected. Your target ratio is largely dependent on your food truck’s cost structure.

### The Bottom Line

It is not easy to calculate revenue generated for all marketing activity. Certain tactics like social media, content marketing, video, and display ads target users long before a purchase takes place. To be clear, marketing is an essential part of a food truck. Food Truck marketing can pay back many times over what it costs. Make the most of your food truck marketing spend by knowing how to measure its results.

The marketing ROI of any campaign ultimately comes in the form of increased sales. That said, if the marketing ROI isn’t there after a few months in, you might just be running the wrong campaign.

Do you calculate your food truck’s marketing ROI differently? We’d love to hear how you do it. Share your thoughts in the comment section below or on social media. Facebook | Twitter