What does ROI calculation give and is it necessary?

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ROI is a coefficient that shows the return on investment. In other words, it is an indicator of the success of investments.

Considering that the topic of our blog is "marketing", we will talk about ROI in marketing, give a formula and examples suitable for these calculations. US marketers call this coefficient ROMI.

Financial report

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To begin with, we propose to define 3 types loadrunner protocol list of businessmen:

Never heard of such a coefficient.

We have heard of it, but we are sure that it is useless, so we have never thought about how to calculate ROI.

They know about ROI and are confident that it is the foundation of business.

We do not seek to justify or refute this indicator, since the debate on this issue continues, and a lot of articles have been written supporting one or another point of view. Our opinion is that in marketing it is simply necessary to calculate ROI.

Agree, if you use advertising correctly, it can be compared to a printing press: invest more – get more . Do you know how ROI is shown in a marketing presentation? “I’ll exchange 100 rubles for 500.” A bit naive, but your result should be exactly like that.

Is it necessary to calculate ROI at all and what will it give?

There are several areas of business where the ROI effectiveness is undeniable:

Direct sales (mailings, orders via the website or catalogs). In this case, ROI helps compare the size of investments with the final indicators. If you know how to calculate ROI, you will understand how you can influence the sales curve in order to improve the effectiveness.

Sales promotion (holding promotions and discounts). If you compare the indicators of the events held, then by calculating ROI you will see their effectiveness and be able to draw the appropriate conclusions.

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Increasing customer loyalty (identifying data to establish long-term cooperation). A good example is automated systems that collect data on customer behavior. If you are targeting business representatives, you need to know how to calculate ROI either for specific products or for specific customers.

Establishing feedback (responding to customer requests). In this case, you will be able to determine how effectively consumer dissatisfaction is neutralized. For example, after solving the problem (eliminating complaints), the client continues to use your company's services. However, it is almost impossible to calculate an indicator that can form the basis for long-term planning.

We have listed the cases in which the use of ROI is most effective. Marketing department employees should remember that it is almost impossible to obtain absolutely reliable data. The reason is that there are many factors that affect the fluctuation of the sales curve (for example, the political and economic situation in the country, the social status of potential clients, etc.).