ROI – Return on investment

Every industry has its own terminology and acronyms, and marketing is no exception. 
 
A term you would have heard before is ‘ROI’. ROI, or Return On Investment, simply means the outcome you achieved from the money you spent.
 
In the past, marketing spend was rarely tracked and analysed. Where it was assessed, the focus was more on qualitative outcomes such as general awareness of the business.
 
In the modern business climate however, your marketing, like all areas of your business, needs to be accountable and deliver results. This does not necessarily mean you should go for the cheapest marketing options, but rather strategically select the type of marketing that gets you effective results. These results will be evident in your ROI.
 
To be able to calculate your marketing ROI you need to be able to quantify exactly how much you spent on a particular promotion or strategy, and the amount of business you achieved out of it.
 
The reality is that some strategies are easier to track ROI that others. However if you keep the need to track ROI central to your planning process you will make the job easier.
 
An example is your newspaper advertising. Running a special deal which the customer can access if they ‘mention this ad’ means you can directly measure what business came out of your investment in that advertisement.
 
Again, as with all of your marketing strategies, you must have a system for tracking and collating all enquiries to be able to effectively assess your ROI.
 
The ongoing challenge for you is to improve your ROI by increasing your outcomes while at the same time balancing your spending.

“This article was written by Tracy-Madonna Wylie, Business Manager, Nutbirdz Strategic Marketing, and printed in the My Marketing Companion column of the Fraser Coast Chronicle in 2007.”