Measuring Your Beauty School Marketing ROI: Where Should You Spend Your Advertising Budget?

Anyone in charge of deciding how much and where to devote finite marketing dollars needs to have a general idea of the return on investment (ROI) of those marketing dollars. This article explains how you measure ROI for beauty school marketing spend, so that your marketing program becomes more effective per dollar over time.

Defining ROI for Beauty Schools

Let’s break down the two main components of ROI: the return, and the investment.

What are potential returns of marketing spend for beauty schools? Possible answers include interest in enrollment—and ultimately, enrollments and students who show up to classes. But there could also be more intangible benefits, such as how well-known your school is in your local area.

What are potential investments in marketing spend? This could be the amount you pay for impression advertising such as with your local newspaper, trade publication, or reviews site. Even more broadly, this could also include the outright cost in dollars or time to invest in your website presence, such as writing blog posts that will bring in organic web traffic. Some schools may be paying a vendor (such as Beauty Schools Directory) to source and send them qualified inquiries—names and contact info of local individuals who are ready to make the purchase decision with a cosmetology program or other beauty program.

“Return on investment” in its simplest form merely divides one into the other. For example, you might add up all the value of the various types of returns that matter to your school in a given month and divide by the aggregate cost of all the marketing investments in that month. Or perhaps you might choose a quarter as your unit of time for both return and investment.

You can calculate your school’s overall marketing ROI but can also calculate it separately by channel or advertising source, for example, to compare the effectiveness against each other.

Cost Per Enrollment (CPE) and Cost Per Start (CPS)

Two very common ROI metrics in the beauty education industry are cost per enrollment (CPE) and cost per start (CPS). As the metric name indicates, these represent the amount of money you are spending on average in a certain time period to yield an enrolled student, or a student who shows up to class and starts the program.

CPE and CPS will vary between beauty institutions, between program types, and within the same institution or program over time. The key is calculate this if you don’t already and to monitor it regularly so you can make adjustments to where you are spending marketing budget.

Not Just About ROI: Other Marketing Allocation Considerations

As critical as ROI calculations are to ensuring that your marketing spend becomes more efficient over time, it’s not practical to only go with the highest ROI channel or advertising source and stop there. There are many other considerations that determine where you should be devoting your marketing budget. For instance:

Volume of interested students.

If your highest-ROI channel or source is effective but is capped in how many enrollments or starts it can produce for your school, then it cannot be your only marketing channel. For example, maybe you have great web presence in your metro area for the highest-volume keywords related to your array of beauty programs, so that students who search Google have a high chance of landing on your site. That’s great, but if this is not enough to fill your classes, you may need to branch out to lower-ROI channels to get incremental enrollments.

Speed to increasing volume.

Different marketing methods have different characteristics, including how quickly the investment generates measurable interest. Paid digital channels are known for pretty immediate impact: you can place a Facebook paid ad and get signups in the next hour. Certain channels are also better at scaling quickly. For instance, increasing your budget with Google paid search ads will reliably increase your volume of resulting interest in a day or a week (assuming you have good fundamentals of your ad campaign and landing page). In contrast, increasing your budget of web marketing for organic traffic—through SEO and blogging—will almost certainly take several months at best to yield fruit. That’s not to say one channel is “better” than the other, but there are marketing channels that fit the time horizon you’re working on.

Match with internal capabilities.

Maybe you are an owner with a great natural touch connecting with students one-on-one, so your Instagram account is a big draw. Maybe you are allergic to writing blog posts and can never find time to produce these on-schedule. Maybe you like the idea of purchasing qualified leads that have a strong chance of converting into an interview or enrollment, but you and your team are overwhelmed and can never call back the student inquiries in a timely way.

All schools have relative strengths and weaknesses in their functional areas. Each of these might have implications for how well you can squeeze more return from the same amount of effort. There’s no one-size-fits-all for which channel is better than another. However, if some of your marketing or advertising cannot be measured at all in terms of return, proceed with caution and make sure you’re not spending dollars there just because you always have or because common wisdom says you need to.

Brand advertising.

Depending on your competition, you may need to devote some ad dollars to certain places just to stay relevant in places where your prospective students are looking. For example, if all your major competitors are advertising at a certain level on a high-exposure platform like Yelp, you may want to consider matching that to avoid appearing irrelevant. This is not to say that you should continue to advertise on any channel that might be poor ROI, but depending on how well your school can absorb a particular type of spending and how strongly you feel about being present in a certain place, at least keep it under consideration.

Brand advertising could be “table stakes” spending to keep up with competitors, but it can also be an opportunity. For example, expanding on the internal capabilities discussion, you might want to lean into an already healthy Pinterest following or a good website in part to show legitimacy when prospective students are doing deeper research on student portfolios or looking for evidence that the school is engaged and active.

Ultimately, the places where you can spend marketing dollars, both digitally and offline, to promote your beauty school are numerous and growing. Having some basic or more advanced ROI measurements to periodically measure the effectiveness of your marketing budget is a must for any organization looking to improve over time.