How to understand the ROI for Marketing


In recent years, ROI was used as the sole criteria through which you might determine just how well your marketing campaigns were performing. According to research carried out by IBM, around 75% of CEOs believe that ROI will be the primary indicator by which they measure their company’s success. The problem seems to be that there are no hard and fast methods for calculating ROI; it’s still a very nebulous quantity.

However, if you really want to get to grips with just what your marketing campaigns can do for you, it becomes necessary to create something close to a metric; something to measure against. Bearing this in mind, there are two options available: basic and advanced.


The most impactive methods

The best basic measure is to look at what your campaign cost you versus the revenue it generates during the lifespan of your marketing venture. You can weigh up the income before and after the campaign to determine just how effective it was. This is why most successful companies rely heavily on email marketing and affiliate solutions as marketing options; they cost next to nothing and you can change the copy or information in accordance with new developments. It might seem too simple to be true, but the most impactive marketing methods often are. You might have to invest in software to blanket-bomb your demographic, but it’s also possible to manage sort of campaign manually and on a smaller scale.


Balancing the books

However, this approach is very basic and fails to take in a number of factors such as staff wages, heating, electricity and the cost of the campaign itself. If you want a more detailed breakdown of how your campaign has performed in comparison with how much you’ve had to spend, then you need to factor in all these associated costs as your bottom line expenditure. You also need to calculate just how your target demographic has behaved; have they spent in accordance with your expectations or have they exceeded or fallen short of them?


Patterns in patterns

Office bookkeeping software such as Intuit QuickBooks or Attaché is going to be a big help in the advanced approach; you’ll be able to analyze the spending habits of your target audience, in accordance with the lifespan of your marketing campaign. Taking the advanced approach means that you’re not just going to look at the final sums and set them off against each other; you’re going to look at the patterns of spending and saving within the overall pattern you come up with. This information will give you a detailed overview of which aspects of your campaign have been the most successful and which have been lost leaders.

Many start up businesses and smaller companies often feel they are restricted in just how they can communicate with potential clients. However, the Internet has opened a huge doorway that can transform even the most shoestring-sized marketing venture into a powerful tool for spreading the word. Think big, but start small and you’ll find that your ROI far exceeds the amount of money you’ve had to spend.

Carlo Pandian

Freelance Writer at Freelancer

Freelance Business Writer