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Businesses are so engrossed with marketing that they often overlook the most crucial aspect. THE ROI. So let’s get to the point. You have run a stupendous #marketing #campaign and it’s time to calculate Return on Investment (#ROI). How do you do it?

There are two methods

A simple ROI calculation method

Here, the calculation is done by integrating the ROI into the entire #business. The #MarketingCost is first subtracted from the #SalesGrowth of the product line/business. The result is then divided by the marketing cost to obtain the ROI.


Campaign attribute calculation method

The simple calculation method assumes that the monthly sales growth can be attributed directly to the campaign. It does not take into account the #comparative #sales figure prior to launching of the campaign.

The attribute calculation method addresses this issue. It calculates the existing sales trend by
considering the 12-month lead-up period leading to the launch of the campaign.

For example, if there is a monthly average sales growth of 4% in that period, then in this method, we will subtract this average sales growth from the total sales growth figure, before making the final calculation.

Therefore, ROI= (Sales growth – average sales growth-marketing cost) / Marketing cost

Other methods

There are other methods that do not focus on sales growth alone. Rather, they focus on increasing sales leads. Here, the value of the sales leads are calculated by multiplying the historical #ConversionRate by the growth in #SalesLeads.

All said and done the ROI is the most #effective metric to measure the results of a marketing campaign. However, marketing is a long-term process that generates sales growth over a longer period only. Therefore, the ROI for marketing campaigns may not look that great in the initial months. The cumulative ROI starts to look better with time.

Hope this gets you thinking

You may also like to read this blog post about  Get Traffic from Sites with Broken Links

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