{"id":9300,"date":"2023-12-09T05:05:35","date_gmt":"2023-12-09T00:05:35","guid":{"rendered":"https:\/\/ppcexpo.com\/blog\/?p=9300"},"modified":"2023-12-22T12:51:53","modified_gmt":"2023-12-22T07:51:53","slug":"what-is-a-good-roi-for-a-business","status":"publish","type":"post","link":"https:\/\/ppcexpo.com\/blog\/what-is-a-good-roi-for-a-business","title":{"rendered":"What is a Good ROI for a Business: 10% More ROI or 10x More ROI?"},"content":{"rendered":"

The answer to the title question is obvious. You don\u2019t need beyond a middle school mathematics class to know that a 10X number is way more than 10% of that number.<\/p>\n

The part of the equation that eludes most marketers is how to actualize 10X ROI (return on investment) in PPC (pay per click) campaigns. The difference between a 10% and a 10X increase boils down to adopting an exponential way of thinking, instead of an incremental mindset.<\/p>\n

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More specifically, it is about identifying when and where the breeding ground for exponential growth exists. If you can predict the moment that your growth is about to explode, you can shift out of your linear-thinking gear and into the exponential one.<\/p>\n

This discussion will compare and contrast exponential and incremental growth and how PPC managers need to utilize both mentalities to produce a winning marketing strategy.<\/p>\n

How Incremental and Exponential Thinking Are Similar<\/h2>\n
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Both incremental and exponential thinking will deliver results. It\u2019s about progress, timing, and putting in the effort. No matter what your mindset is, if you\u2019re not pushing your campaigns to perform, then you won\u2019t witness that upwards progress.<\/p>\n

Continuous effort \u2013 that\u2019s the name of the game.<\/p>\n

When you commit the time to improve your PPC efforts<\/a> little by little, nonstop, growth is guaranteed. At first, this may seem like incremental growth, but, over time, you\u2019ll start to see exponential returns.<\/p>\n

In this respect, these two ways of thinking are interconnected. Marketers need those small, incremental wins to produce exponential growth at later stages.<\/p>\n

Improvements to your PPC campaigns are synergistic. This means that they don\u2019t just add up but build upon one another. Imagine that you and a colleague worked on the same project independently. The results would be less than if you worked together. Thus, 1 + 1 does not always equal 2. Sometimes, 1 + 1 is greater than 2.<\/p>\n

The Differences between Incremental and Exponential Thinking<\/h2>\n
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The similarities between these two mindsets help shed some light on how they are different. In the early phases, incremental and exponential thinking start on very similar courses. The incremental mindset is great in the short-term when you want immediate results, but it is outperformed by the exponential approach the longer time goes on.<\/p>\n

When a child is given a choice of $1 each day for a month (linear growth), or a small amount, like a penny, but it doubles each day (exponential growth), chances are most children will pick the first option.<\/p>\n

Why? Because the child doesn\u2019t think exponentially or long-term. The idea of waiting for that penny to double each day, while they could immediately have a dollar today is too tempting. The math, however, is well in favor of the exponential path. By day 12, you really begin to see the exponential path outperform the incremental one.<\/p>\n

For the first 11 days, the incremental gains are better. Then, exponential rockets past, as represented in the table below.<\/p>\n

[ninja_tables id=”9904″]<\/center><\/p>\n
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This accurately depicts the differences between incremental and exponential thinking, particularly in how they produce business results. Growth starts slow before snowballing in the later phases of development.<\/p>\n

The best way to describe this difference is to think of each approach as a road. Incremental thinking is a straight path will clear visibility. In the above example, the child knows<\/em> how much money they will have by the end of the month, if s\/he chooses a dollar each day.<\/p>\n

Exponential thinking, on the other hand, is a road with an upward curve. You can\u2019t always see what\u2019s around the bend or know how steep the curve is.<\/p>\n

This analogy provides insight into why incremental thinking is often the fallback way of thinking for marketers. Incremental progress is safe and easy to measure, while exponential thinking is less intuitive.<\/p>\n

One way that marketing professionals distinguish incremental from exponential thinking is their objectives. The focus of incremental thinking is to improve or make something better. Exponential thinking, on the other hand, is about creating something different. <\/em><\/p>\n

PPC managers need both of these objectives to be successful.<\/p>\n

The Shortcomings of Incremental Thinking<\/h2>\n
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Human beings are hardwired to think in terms of incremental progress. It\u2019s a linear mindset; you leave point A to arrive at point B. If the journey takes an hour, then the expectation is that you\u2019ll be halfway there by the 30-minute mark.<\/p>\n

The problem is that business growth doesn\u2019t happen incrementally. Your growth trend line is not a straight line, but a curve. Thus, marketers need to try and ignore their natural tendencies to think in the short-term.<\/p>\n

It isn\u2019t easy. Waiting for a growth explosion that you can\u2019t see around the bend can be extremely challenging.<\/p>\n

For example, if you\u2019ve set a year-end goal of acquiring 100 new customers through PPC marketing, the expectation is that you\u2019ll have around 50 customers by mid-year.<\/p>\n

Point A to B, remember?<\/p>\n

When marketers think in terms of incremental growth, they begin to worry when the time spent is not aligned with the progress achieved. They will probably have less than 50 customers by mid-year. This can cause PPC professionals to mismanage their campaigns and keywords.<\/p>\n

They start shuffling their campaigns and making radical changes to create immediate results. These short-term strategies don\u2019t have the scalability and long-term potency that successful PPC marketing requires.<\/p>\n

Short-term changes might make you look and feel good now, but there will come a time when the competition jets past you on the exponential growth superhighway.<\/p>\n

A real-world example to demonstrate this is to think about constructing a jigsaw puzzle. The incremental thinker would immediately begin fitting pieces together and looking for matches.<\/p>\n

Exponential puzzlers, on the other hand, take the time to find all of the pieces that form the border and then organize the remaining half-hour by colors and distinguishing characteristics.<\/p>\n

This takes a lot of time and preparation. In the very early stages, the incremental thinker will have more pieces finished on the table. Thus, it will appear <\/em>that the amount of time spent aligns with the progress achieved.<\/p>\n

However, the patience and preparation of the exponential puzzler will quickly pay off. While they may have had 0 pieces on the table in the first half-hour, suddenly they\u2019ll begin piecing the picture together faster and faster.<\/p>\n

By the end, the incremental puzzler will still have a scattered puzzle, while the exponential thinker will have the finished product. Why? Because incrementally putting individual pieces together doesn\u2019t have the capability to snowball.<\/p>\n

How Impatience Can Be a Detriment to Exponential Thinking<\/h2>\n
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The gap between the incremental and exponential lines is the danger zone for exponential success. This is the period when it is hardest to justify exponential growth. It\u2019s also when you\u2019ll start facing pressures from stakeholders and other concerned parties.<\/p>\n

Waiting for results that are somewhere <\/em>around the corner is not always possible when clients or stakeholders are asking for results. Again, there is an expectation that the progress will be on-par with the time spent.<\/p>\n

With exponential growth, you may only be 15% of your way to the goal at the midpoint of the project. You\u2019re not at the bend of the curve where progress really takes off. Those stakeholders begin asking, \u201cWhen are we going to see results?\u201d<\/p>\n

The businesses that are progressive enough to stay the course on their strategies will end the year with the same stakeholders baffled by how much progress was made.<\/p>\n

But, when businesses become impatient with slow progress, they abandon their exponential thinking and revert to their natural, incremental inclination.<\/p>\n

For PPC managers, this can result in stagnant campaigns that don\u2019t achieve the same level of results as your competition. You may win today\u2019s battle, but you\u2019ll ultimately lose the PPC war when your competitor\u2019s long-term strategies start blossoming into exponential growth.<\/p>\n

A lot of managers pick strategies that are safe and less likely to fail. In doing so, they ignore the most efficient routes. As Pete Palmer, an American sports statistician, puts it, \u201cThe pain of looking bad is worse than the gain of making the best move.\u201d<\/p>\n

It is this fear, coupled with impatience, which causes many managers to ignore the potential yields of a long-term, exponential PPC strategy.<\/p>\n

Laying the Foundation of Your Exponential Mindset<\/span><\/h2>\n
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You need to cultivate an exponential mindset. It isn\u2019t just about developing strategies with exponential growth in mind. Instead, you need to think <\/em>and plan <\/em>exponentially.<\/p>\n

The key is to make your exponential voice louder than your incremental hardwiring. Otherwise, you may slip into your natural, incremental tendencies without realizing it. This causes PPC managers to create campaigns and strategies that they think<\/em> are built to achieve exponential returns, but are actually linear in nature.<\/p>\n

An exponential mindset starts at the very core of your business and its mission statement. If you look at some of the top companies in the world, like Apple, Facebook, Google, Airbnb, and others, they use a massive transformative purpose (MTP) as part of their tagline or mission statement.<\/p>\n

MTP is more impactful than a traditional mission statement. It is designed to be an aspirational tagline that the organization and its staff can use to encourage innovation and strive beyond what is expected of them.<\/p>\n

Google\u2019s MTP, for example, is to \u201cOrganize the world\u2019s information.\u201d Facebook uses \u201cMake the world more open and connected.\u201d Again, exponential thinking is less about being better <\/em>and more about being different. <\/em>This is best represented by Apple\u2019s simple slogan of \u201cThink differently.\u201d<\/p>\n

The ambiguity of the MTP statement allows for out-of-the-box thinking, which often leads to exponential growth potential. The MTP also provides direction and focus when there isn\u2019t any.<\/p>\n

Again, the exponential path is not always clear and direct. When the focus of your company is created from an exponential mindset, it is easier to guide people and create an organization that is built for long-term success.<\/p>\n

In other words, a massive transformative purpose instills exponential thinking from day one and ensures that you remain comfortable and patient during periods of uncertainty.<\/p>\n

Maintaining Your Exponential Course<\/h2>\n
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As mentioned earlier, the gap between exponential and incremental thinking in the early stages of development is one of the most crucial stretches of times. It\u2019s when your exponential mindset is most in jeopardy of being ignored or replaced with a new, short-term direction.<\/p>\n

There are a few tactics you can implement to protect your exponential mindset from distraction.<\/p>\n

Convey The Situation \u2013 Times Are Changing!<\/h3>\n
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As mentioned earlier, adopting an exponential mindset is about thinking differently, not just making things better. And, thinking differently isn\u2019t just a matter of creating more impressive growth, although that\u2019s certainly a great benefit.<\/p>\n

Thinking differently in the PPC world is a necessity and an increasing expectation of the consumers you\u2019re hoping to attract with your ads. If you can\u2019t satisfy this expectation, your PPC efforts will be at risk.<\/p>\n

Here is the situation: there are more and more marketers leveraging PPC ads than ever before, yet the real estate for ad placements is staying the same. On a Google SERP, for example, there are only four ad spots available on the top.<\/p>\n

All of this increased competition means it is becoming more and more challenging to place ads. Moreover, ad costs and CPC rates are getting higher and higher. If you\u2019re relying on dated, traditional ad messages and tactics, these costs are going to continue to grow and require you to work harder to succeed.<\/p>\n

With an out-of-the-box, exponential mindset, thinking differently is at the foundation of all of your strategies. It\u2019s even built into your MTP! This makes it more natural to produce ad messages and campaigns that actually stand in this ultra-competitive environment and deliver results.<\/p>\n

In turn, this improves clickthrough rates and helps keep these rising costs low. So, while your competitors are trudging along the traditional pathway and spending more for fewer returns, you\u2019ll be having the opposite experience.<\/p>\n

This is perhaps the best way to maintain an exponential course. You need to demonstrate the changing PPC environment and make it clear that adapting to a long-term, exponential growth pattern is a necessity for your survival in the market.<\/p>\n

It\u2019s about meeting the demands of today\u2019s consumers and channels.<\/p>\n

Create Short-Term Prediction Milestones<\/h3>\n
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Conveying the situation to stakeholders and colleagues is a vital first step. However, you still want to be able to provide some semblance of evidence to support and justify your exponential journey.<\/p>\n

With linear thinking, you can predict an estimated arrival time because the path is straight and visible. Again, it\u2019s the idea of leaving A and arriving at B. If you anticipate that the journey takes an hour, then you know when your goal will be reached.<\/p>\n

Remember the example of the child with a choice between earning one dollar a day for a month, or earning an amount that starts at $0.01, but doubles with each day? Incrementally, the child leaves point A with $0, and knows he\/she will arrive at point B with $30. It\u2019s easy to measure.<\/p>\n

The exponential curve, on the other hand, is not so visible. You can roughly predict when growth will start to build, but the real challenge is anticipating how rapid that growth will build.<\/p>\n

This is where data becomes your biggest ally. While exponential growth is harder to track and predict than incremental thinking, it isn\u2019t impossible. The real trick is understanding the limitations in predicting exponential growth and avoiding the pitfalls.<\/p>\n

Predicting exponential results and, more importantly, showcasing<\/em> those results to others, isn\u2019t about predicting the destination, but rather setting different milestones along the journey.<\/p>\n

Incremental: \u201cThe goal is to reach the destination by May.\u201d<\/p>\n

Exponential: \u201cThe goal is to grow by X% in this time period.\u201d<\/p>\n

These milestones provide proof of the concept that your progress, however slow, is on target. The truth is that you can\u2019t predict when your exponential growth is going to really take off.<\/p>\n

If you make the mistake of setting an incremental-style goal and your exponential curve is further away than expected, your strategies are going to appear ineffective. In reality, they just haven\u2019t matured yet.<\/p>\n

It\u2019s best to monitor your exponential progress and set short-term milestones along the journey.<\/p>\n

Identify and Correct Detractors<\/h3>\n
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Despite your best efforts in setting milestones and conveying short-term results to stakeholders and other parties, there are still going to be detractors that demand more progress and question your results.<\/p>\n

Critics are good; detractors can be toxic.<\/p>\n

When these individuals are left unchecked, they spread their malcontent to others. You aren\u2019t only letting them doubt your long-term PPC strategy; you\u2019re also allowing them to detract from the vision and purpose of your company, as outlined in your MTP.<\/p>\n

You have to work extra hard at getting them on board with a long-term strategy.<\/p>\n

The first option is to provide them with real-world applications of exponential growth. Perhaps the most common example is to think in terms of compounding interest.<\/p>\n

Let\u2019s say you invested $1,000 at 3% interest a year. In the first year, your interest would be $30. If the interest grew incrementally, then you could calculate your interest as $1,000 + ($30 x t), where t is the number of years. This is known as simple interest.<\/p>\n

Compounding interest, on the other hand, grows exponentially. That 3% interest doesn\u2019t just affect the initial investment, but all of the accumulated interest over the years. Thus, the math is a little more complex.<\/p>\n

A = P ( 1 + r \/ n ) ^ nt<\/strong><\/p>\n

where …<\/p>\n