ROI in Marketing - Numbers and Meaning Behind Your Investments

ROI isn't just numbers - discover how to measure what really matters in your marketing beyond dollars and cents.

Hey marketer! 👋🏻

Today we're diving into a topic that's often discussed in marketing, but rarely explored in its full context: Return on Investment. You might know it by its acronym ROI. Most people think of it as a simple number - how much money each dollar invested in advertising brings back. But what if we looked at ROI from a broader perspective?

The Theory Says...

...it’s a key indicator of marketing effectiveness. It expresses the ratio between net profit from a marketing campaign and the costs of that campaign. Typically expressed as a percentage, it’s calculated as (net profit / investment) x 100. For example, a 200% ROI means that every dollar invested brought back two dollars in net profit.

In digital marketing, ROI is often measured using various metrics like conversions, order value, or customer lifetime value. The goal isn’t just to measure the success of individual campaigns, but also to optimize your marketing budget and strategy for maximum return on investment.

You’ll easily find tons of articles and examples about this. It’s marketing fundamentals.

In Practice...

...it’s much more than just a marketing metric. In the life of a marketer or entrepreneur, one of the main questions that should constantly be asked is: what’s in it for me? What benefit will I get from creating a profile on another social network? What will sponsoring a sports team bring me? How will switching my e-commerce platform pay off? 🤔

The simplest calculations are, of course, financial ones. No doubt about that. You run an ad and calculate how much it earned. But then there are other metrics. Indirect ones that also need to be considered. For example, customer satisfaction, customer experience (like convenient shopping), good reputation, employee satisfaction, number of complaints, but also the good feeling from charitable collaboration. You can probably easily think of plenty more.

ROI as a Decision-Making Tool

This might sound obvious to you - nothing groundbreaking. But I’m increasingly encountering people who come to me with requests to implement new things without having thought them through at all. And when I ask them what they’ll get out of it, they usually respond that “it would probably be good because they saw it at a competitor’s.”

I’ve recently dealt with several requests to implement a chatbot on small business websites. 🤖 It’s certainly a smart thing, can be useful. But when I asked clients what it should serve on their site, they told me it should give visitors answers about their offer. Well, isn’t that what the website is supposed to do? Plus, the offer involved services that are always handled individually. Just feeding the chatbot with information to make it worthwhile would take quite a bit of time.

If we needed to relieve an overwhelmed customer support line, it would make sense to sort requests and direct them to competent people or to help resources to reduce pressure. But here they wanted it just because they thought it was modern. And it might interest people. 🤷🏻 After a short discussion, we always arrived at the conclusion that people would benefit more from a real human dedicated to helping them.

So not a chatbot, but a customer chat. And clear, specific contact details with a consultation offer for each service. The return on a chatbot simply wasn’t there - in the end, it would land on a real person’s desk anyway. So why complicate things? We want to nurture customers, not send them to a robot. 😉

ROI in marketing is much more than just a number in a spreadsheet. It’s about the energy we put into our work and what comes back to us. It’s about our clients’ satisfaction, our personal growth, and long-term building of something meaningful.

So next time you evaluate the success of your marketing strategy, don’t forget to look beyond the numbers. You might discover that your investment brings a much greater return than you thought.

Looking forward to the next article! 👋🏻

Jan Barborik

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