Lucrative Ways Of Estimating Your Return On Investment
Businesses usually calculate their ROI based on profit of their investment divided by the cost of it. Result is a percentage that then allows marketers to find out whether or not advertising spend was worth their investment. In marketing some businesses may consider total revenue while some others may either calculate gross profit or net profit as their ROI estimation.Most businesses use the basis formula which is to calculate the gross profit for sold units minus their marketing investment divided by their marketing Investment.
If your marketing efforts deliver over time, you can improve it so your ROI will be maximized. Naturally some businesses don’t calculate their ROI all the time. They have an idea of their investment and calculate how much they get in return if they invest certain amount of Money.
How can you calculate your ROI in classic advertisement?
In online marketing, you can calculate your return on investment based on sales you get per unit. In print media on the other hand, it may get kind of tricky. So the question is how can you find out? In classic advertisement such as: TV, Radio, Print Media (newspapers, magazines, brochures) , a business owner don’t see any footprint a customer leaves telling him/her they saw an advertisement. Unlike online advertising, classic advertisement is in fact sometimes can’t be seen immediately.
The best way of measuring your return on investment in offline advertisement
Businesses in print media can calculate their ROI by selling coupons. In department stores or ordinary stores with coupon or word codes, you can discover how many people have bought certain items.
It is significant to understand that ROI can be measured in various ways because customers have different behaviors. Some people may not buy the item right away and make a decision to buy the product 2 or 3 months later. This is why in offline marketing ROI may come in very low but over time it gets higher. For example, if you sell computers offline and distribute coupon codes to see how many have bought it in stores, first you may not see many sales depending on the market and purchase behavior, but over time, you get return on your investment. You should choose what advertising works for you. Some flower shops use their ads on public vehicles, while some others use billboards.
Be creative in marketing
Return on investment is just a number, especially in print media. In marketing you should be creative and target the right customers. If you sell dresses for pregnant women, then target pregnant women in various ages. Demographic also plays an important role. In classic advertisement, you don’t see boost in sales immediately. Some businesses don’t mind if the numbers don’t add up immediately. They know that they eventually get there.
In online marketing, you should apply surveys and polls in order to get an insight about your product or service. Prioritize the areas of opportunity based on the data and insights you’ve gathered, then run your ads. There are many elements which you should consider when it comes to increase in conversion rates. I have explained in detail in my book “multilingual digital marketing”.