What is ROI (return on investment) or ROMI (return on marketing investment)?Return On Investment - ROI(%)= Net Profit ($) / Investment ($). ROI/ROMI is the profit you earn after each investment you make, whether it be a website redesign or ads on Facebook or Google. The higher your ROI the higher your profits. Calculating ROI can be difficult depending on how many variables you have in your initial investment.
ROI helps you justify investments for marketing. In tough times, companies often cut marketing budgets – which is a dangerous move since marketing is an investment that creates revenue. By focusing on your company's ROI, you can help move away from the idea that marketing is an ugly expense that can be cut when times get tough.
Return on Marketing Investment (ROI) =
(Sales Growth – Marketing Cost) x 100 / Marketing Investment
Let’s say we have company X that has an average of 4% organic(un-paid) sales growth and they run a $10,000 campaign for a 4 weeks. The sales growth for that month is $15,000. The calculation goes like this :
Return on Marketing Investment = [($15,000 - $10,000) / $10,000)] x 100
= 50% ROI
There are a lot of awesome ROI calculator tools out there, here is one worth checking out.. To estimate ROI you need to have some established data and metrics. You must assess the following with every opportunity that comes your way:
- The Value
- Cost(s)
- Control and Limiting Variables
- Estimated Return
By following marketing best practices through social media, emails, blogs, SEO and website pages, you can help ensure the best ROI possible through your efforts. Monitor your data by analyzing, updating, testing and repeating until your marketing process is down. Don't fall into the trap of seeing a fancy number of now many people will see your ad and waste thousands of dollars. Dig deep into your buyer personas and industry to see if your desired marketing route is the best one to take.
If you need some help researching the best route to take give us a shout anytime, we are here to help! In the meantime, check out these following posts you might be interested in :
How To Create Top Performing Posts on Instagram
How To Create Epic Facebook Ads
Generating Leads With Cold Calls Is So 2008
