To start with... What is ROI?
The acronym ROI stands for “Return of Investment”. This metric is used to determine the benefits obtained by the company by carrying out different marketing actions. It is an ideal tool for measuring the financial performance of a business.Advantages of calculating the return on investment
After implementing a marketing strategy, it is essential to know the results obtained from it and measure its profitability . This is where the ROI value comes into play, as it indicates what return on investment you have obtained. As you observe the results of that investment, you will know how to make future investments and you will have more information about which actions are more or less viable for your business and how to guide it in the future. ROI has more advantages for your business , such as:- It allows you to know the status of an investment in real time.
- It helps to set realistic goals and objectives.
- It serves as support for requesting new investments or projects.
- Provides data on time in business.
Types of ROI in marketing
The different types of ROI in marketing will depend on the channel used.ROI on Instagram
To start measuring ROI on social media , it is essential to take into account several KPIs : impressions, reach, engagement, traffic, interactions, mentions, bounce rate, conversion rate, CTR, PPC and CPC. Instagram has a data analytics section (Instagram Insights) where you can find all this detailed information.ROI on Facebook
Just like with Instagram, on Facebook we also have to have some KPIs set for our strategy. With Facebook Ads the task is much simpler. From there you can see the direct return on investment generated by the clicks on your ads.ROI in SEO
In the case of ROI in SEO positioning , the KPIs that must be taken into account are: site conversion rate, average user ticket, investment figure and average number of visits per month; for this you can use the Google Analytics tool.ROI on other marketing campaigns
For the rest of the marketing campaigns, you can calculate the ROI by using some data such as: the cost of the content , which includes the total cost of the investment; the cost of distribution , how much you have spent on distributing the campaign; and the total income , the amount of money that has been obtained.How to get ROI from marketing and sales actions?
Use a base formula to calculate ROI
The formula to calculate ROI is very simple:ROI = (Total profit - Investment) x 100 / Investment
With the result of this formula you will obtain a percentage that will indicate the profit obtained.Calculate ROI in Excel
Another option to calculate ROI is through the Excel tool. It's very simple . We'll show you how! To do this, you need to have all the data required by the formula on an Excel page. Here's an example. Imagine that you have entered the investment figure in cell A1 and the total profit in cell A2. The formula you would have to apply is: = (A2-A1)/A1 . The result will be the ROI percentage .Use tools to calculate ROI
There are also other tools to calculate ROI quickly and online. These are ROI calculators that can be found on the Internet and are free . They will ask you to enter some data such as the investment figure, the profit figure, dates... and in just a few seconds you will see the result of your ROI.How do you know if the result is profitable?
With the result of the formula we have indicated above, you will obtain a percentage that will indicate the profit obtained . Don't know how to interpret this percentage? We can help you!Negative ROI
A negative ROI means that the investment you have made has not generated profits, but has incurred losses . The percentage you have obtained from the formula will be negative.Positive ROI
A positive ROI indicates that the investment has generated more income than expenses . The higher the ROI, the better the results of that investment, which translates into benefits for the business .What to do if the return on an investment is not as expected?
If after obtaining the ROI you observe that the percentage is negative, that is, you have had a negative ROI, we recommend that you analyze all the strategies and actions again to find out what has failed. From Línea Gráfica we are going to give you some tips to avoid your ROI being negative .- Stay informed about your sector. It is very important to stay up to date with the latest changes and news that affect your business. In addition, conducting a competitor study is a basic step to start with any strategy. These actions can make your ROI become positive.
- Analyze the results obtained. As we have already indicated, it is essential to thoroughly analyze the strategy and its results. This will give us a lot of information about what to do or not to do in the future.
