How much do you spend on you marketing? Do you know what your return on the amount invested is?
A common definition of Return on Investment involves looking at the cost of a marketing campaign relative to the profit generated.
You put £1000 into a campaign to try to sell £100 worth of goods. You sell 30 of them at the profit of £50each making a total profit of £1500 on the campaign.
But this profit is before the cost of the campaign so take off the campaign costs I.e. £1500 profit less cost £1000 = £500
The return gained is £500 from your original marketing investment of £1000.
Your Return on this Investment is £500 divided by £1000 = 50% ROI.
Working out your return on investment ensures that you are spending your money on the best form of marketing.
This is a simple calculation of Return of investment without factoring in the element of time.
Calculating the ROI it’s not just for large companies…. Everyone in business needs to know the sums.
- Make sure you know how much you are spending.
- If it’s working them repeat if not then try something else
- ALWAYS make sure you know the sums
Alway working out your return on investment as it will ensure that you are making the most of your marketing budget.