Marketing Online
08 mayo 2023
Welcome to the real world, yes, where numbers rule and opinions fade away. If you are one of those few people who hasn't yet joined the ROI craze , then get ready for a dose of reality.
Because ROI is the cornerstone of any business strategy , and if you are not measuring and analyzing your results, it means that you are stuck in the past. But don't worry about anything, we are here to solve everything.
So get ready because at Kiwop we are going to test your analytical skills and immerse you in the world of ROI!
Do you dare?
What is ROI
Do you want to know what ROI is? Of course you do, because after all, who doesn’t like to talk about finances and performance metrics? We know it may sound boring, but ROI is something that every business needs to know.
Don't worry, we're not going to sound like financial experts, or try to impress you with fancy words. We're going to talk about what matters. Promise.
ROI is one of the most important metrics for any company that wants to measure the success of its investments and digital marketing strategies , and if you don't know it, you're in serious trouble.
ROI is an acronym for “Return On Investment,” which refers to the amount of money earned or lost relative to the amount of money invested .
Basically, ROI is used to measure the effectiveness of an investment . If the ROI is positive, it means that the investment has been profitable, and if it is negative, it means that the investment has resulted in losses.
So if you're ready to stop wasting money on investments that aren't worth it, and want to learn why ROI can help you make smarter business decisions, read on.
We promise it won't be as boring as it sounds!
growth in return on investment
The importance of taking ROI into account
As you may have already noticed, ROI is a fundamental metric in the business world, as it allows us to measure the profitability of an investment. But why is it so important?
We bring you the main reasons why ROI is vital for any company :
It allows you to identify which investments are generating positive results
This metric determines whether an investment is generating profit or loss . If you don't know the ROI of your investments, you won't know if you're getting an adequate return on your investment.
This is especially important in the business world, as we assume you care about every penny you invest. It can also help you fine-tune your strategy and optimize your investment to maximize your return.
Allows you to make informed decisions
Return on investment makes it easy to compare different investments and determine which is the most profitable .
By analyzing the ROI of different strategies and tactics, more informed decisions can be made about which strategies to continue, which to adjust, and which to abandon altogether.
For example, if you have two investments that look equally attractive, you can calculate the ROI of each to see which offers the highest return.
Helps justify the investment to shareholders
It is not only important for making business decisions, it is also important for investors and shareholders.
If an investment can be shown to have generated a positive return, you can justify continuing that investment in the future to your company's shareholders or investors.
Or on the other hand, if in your case you are looking for financing for your company, investors will want to know what the ROI of your current investments is to determine if your business is a good investment .
By the way, we have more secrets for you on how ROI influences digital marketing .
Okay, now that you know all this, you're probably wondering when is the best time to look at that damn metric.
We'll tell you more about it below.
The answer is simple: always. From the moment an investment is made, its impact and the profitability it generates must be taken into account.
It is important to measure ROI at all stages of the investment process , from planning to final analysis.
During the planning phase, different options should be considered and the potential gains and associated costs should be assessed. At this point, measuring ROI is critical to making informed decisions and minimizing risk.
Once the investment has been made, it is important to monitor the ROI periodically to assess its performance. This allows potential problems to be identified and corrective measures to be taken to improve profitability.
Furthermore, measuring ROI is also essential to justify the investment to investors and senior management, as we have seen above.
What now? We're sure the time has come for you to know how to measure ROI for your business.
So get out your calculator and get ready to learn what reall japan telegram data y matters: the numbers!
But don't worry, it's not as difficult as it seems!
Increased return on investment
The best way to measure return on investment
You have already seen that ROI is much more than that idea that came to mind from the typical image of a boring PowerPoint full of endless graphs and figures.
But you know what? You just have to follow these 5 simple steps to be able to determine what the return on investment is for each of the investments you have made and will make from now on:
1. Define your goals
The first thing you need to do is to clearly establish your objectives. What do you want to achieve with your marketing investment? Do you want to increase sales, get more leads, improve your presence on social media?
It is important that you have clear and measurable objectives .
2. Establish metrics
In order to measure ROI, you need to establish metrics that allow you to quantify the results . For example, if your goal is to increase sales, you will need to measure the number of sales generated thanks to your marketing strategies.
3. Calculate the cost of the investment
The next step is to calculate the cost of the investment. This includes not only the cost of the campaign itself, but also the associated indirect costs , such as production costs or staff costs .
4. Calculate the profits obtained
Once you have your goals and metrics clear, you will need to calculate the benefits you have gained from your marketing strategies. For example, if your goal was to increase sales, you will need to calculate the value of the sales generated .
5. Calculate the ROI
Finally, you can calculate the ROI using the following formula: ROI = (Profits – Investment costs) / Investment costs. The result will indicate the percentage of return on the investment made .
And you're ready to take action!
If your strategies include email actions, here are our 5 tips to improve the return on investment of email marketing campaigns .
ROI: the best ally for your investments
At Kiwop , we hope that after reading this article, you have a clearer idea of how to measure ROI. Never forget that measuring return on investment is essential to determine whether a marketing strategy is effective or not.
So, if you're not measuring your ROI yet, we highly recommend you start doing so. You don't want to waste money on strategies that don't work, do you?
For this reason, if you need help to take your marketing strategies to the next level, do not hesitate to contact us at Kiwop . Our team of digital marketing experts are ready to help you at all times.
Oh, and before we go, remember that not only do we have a presence on LinkedIn , but we’re also killing it on Instagram and TikTok . As
