Ok, so I giggled when I wrote that headline, because I would never consider myself to be cool enough to say something so…cool. The point is, measurement of ROI doesn’t have to be crazy serious; it can be as simple as a little math.
The topic of simple ROI calculation came up when one of our branches wanted to track the ROI of a radio remote with the number of tacos he gives away. See, if you attend the event and apply for a job, you get a voucher for a free taco. They just count the number of vouchers given away and there is the ROI. It is so simple!
Now, I would’t advocate for everyone (or anyone, really) to use free tacos as a measurement tool, but it can be really easy to quantify ROI.
(Return – Investment)
What you got back, minus the amount you invested, divided by what you invested gives you a percentage of return.
Now, most campaigns require more complex mathematics, but you are still striving for getting more than what you put in. The key is to establish what you would consider success; what is the percentage that makes the effort worth while?
I am reminded of a fantastic article from Marketing Mo that breaks down how to determine ROI success. Return on Investment – Formula and Use breaks it down for you. They outline three main buckets that marketers might consider as return:
- Total revenue generated
- Gross profit: revenue minus cost
- Net profit: gross profit minus expenses
Then you can break it down further. Are you trying to acquire customers? Drive sales? Increase engagement? Ultimately, it is about making data-driven decisions and showing the worth of a robust marketing and communications strategy. We are all fighting for those precious budget line-items and it’s time to make sure you are being smart, proactive, and thoughtful with yours. In the end, it all comes down to simple math.
Ideally, though, just math alone doesn’t define ROI. Let’s not forget about qualitative data, but that’s for another blog post.