{"id":70857,"date":"2023-02-28T08:22:20","date_gmt":"2023-02-28T08:22:20","guid":{"rendered":"https:\/\/siit.co\/guestposts\/?p=70857"},"modified":"2023-02-28T08:22:20","modified_gmt":"2023-02-28T08:22:20","slug":"complete-guide-to-roi","status":"publish","type":"post","link":"https:\/\/siit.co\/guestposts\/complete-guide-to-roi\/","title":{"rendered":"Complete guide to ROI"},"content":{"rendered":"
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Complete guide to ROI: find out if your investments have been efficient by calculating this metric<\/span><\/span><\/h2>\n<\/div>\n<\/div>\n
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ROI is a financial metric based on the ratio of money earned to money invested in a particular action.\u00a0It means “Return on Investment” or “Return on Investment”.\u00a0<\/span>This return calculation is widely used in marketing to validate the investments made.<\/p>\n<\/div>\n<\/div>\n

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The only way to correctly choose the investments that a company must make is to understand well which are the strategies that give results and are capable of bringing the business closer to its objectives.<\/span><\/p>\n

But with so many customer acquisition and retention tactics, how do you know, specifically, what works best for your business?<\/p>\n

It seems complicated, doesn’t it? But the answer is to accurately calculate the ROI and act accordingly.\u00a0The great advantage is that, in\u00a0Digital Marketing, this is completely possible.<\/p>\n

Do you want to know more about ROI, how to calculate it, and what it is for? Stay with us, we’ll explain everything you need to know about this impressive metric!<\/p>\n

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What is ROI (return on investment)?<\/h2>\n

The term ROI is the acronym for the English expression “Return on Investment”, in Spanish Return on Investment.\u00a0Through this indicator, it is possible to know how much money the company is earning (or losing) with each investment made.<\/p>\n

This includes everything that is done with the objective of obtaining future profits, such as\u00a0marketing actions, sales training, acquisition of administration tools, and new customer retention strategies, among others.<\/p>\n

In this way, it becomes clear not only which investments are worthwhile, but also how to optimize those that are already working, in order to have better performance. How To Calculate ROI<\/a><\/p>\n

ROI can be calculated in several areas, such as:<\/h3>\n
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  • ROI of Content Marketing;<\/li>\n
  • email marketing ROI;<\/li>\n
  • ROI from social media;<\/li>\n
  • ROI of campaigns in Google AdWords;<\/li>\n
  • ROI corporate blog;<\/li>\n
  • SEO ROI;<\/li>\n
  • among others.<\/li>\n<\/ul>\n

    Why is ROI important to the success of my business?<\/h2>\n

    As you can see in our\u00a0Digital Marketing 3.0 ebook, the subject is very broad and offers an incredible variety of methods and tools for those who want to do business on the Internet.\u00a0But, many options can confuse even those who already know the subject well.<\/p>\n

    Apart from that, remember that Digital Marketing actions, although reliable and effective, can offer different results depending on your market niche, and target audience, among other details.<\/p>\n

    Therefore, controlling ROI is essential.\u00a0It helps answer some deep questions about your business, like these:<\/p>\n

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    • What are the company’s major sources of profit?<\/li>\n
    • What are the most effective communication channels?<\/li>\n
    • Is the performance of marketing initiatives as expected?<\/li>\n
    • Has the sales process proven to be efficient?<\/li>\n
    • Does customer service\u00a0contribute\u00a0to customer loyalty or is it falling short?<\/li>\n<\/ul>\n

      Of course, it’s useless to expect to find detailed information solely by looking at a\u00a0specific ROI period, but it will give you a good direction of where to look.<\/p>\n

      Then, using other\u00a0important metrics and indicators, you can drill down to the points that need improvement.<\/p>\n

      How to calculate ROI?<\/h2>\n

      The easiest way to calculate ROI is by following this formula:<\/p>\n

      ROI = [(income – costs) \/ costs] x 100<\/strong><\/p>\n

      You can use it comprehensively, to analyze the business as a whole, or specifically, to evaluate a project or area, individually.\u00a0By working in this way, it is possible to identify errors and problems in any part of the business.<\/p>\n

      In addition, the final result is in percentage, which makes it easy to compare the ROI of different actions or strategies.\u00a0To facilitate this process,\u00a0we have created an interactive calculator, so you only need to enter your numbers and press the “calculate” button.<\/p>\n

      What is classified as “income”?<\/h3>\n

      Revenue is everything the company collects from sales.\u00a0When calculating ROI for a specific area or campaign, remember to only use the amount raised by your chosen segment.<\/p>\n

      For example, to calculate the return on investment for an\u00a0e-commerce platform in its Email Marketing campaigns, the value of the income must only represent the sales of that channel and not that of the store as a whole.<\/p>\n

      What are “costs”?<\/h3>\n

      The costs are all those expenses necessary to make the investment viable<\/strong>.<\/p>\n

      In the case of the previous example, of the\u00a0e-commerce platform, the costs are represented by the amount paid to use the platform, the price of\u00a0hosting the website, the investments in paid advertisements, the expenses with the Internet, telephone, and everything that is necessary.<\/p>\n

      How to evaluate the results of your business?<\/h2>\n

      To better explain this metric, let’s analyze the fictional case of the\u00a0virtual store\u00a0mentioned above.<\/p>\n

      Let’s say the business as a whole received $14,000 in sales and $5,000 came in through the online store.<\/p>\n

      To keep the site running, you need to spend $1,000, while the physical store needs $3,000.<\/p>\n

      In this case, the ROI of our electronic commerce would be:<\/p>\n

      ROI = [(5,000 – 1,000) \/ 1,000] x 100<\/strong><\/p>\n

      ROI = (4,000 \/ 1,000) x 100<\/strong><\/p>\n

      ROI = 400%<\/strong><\/p>\n

      In other words, the return obtained is 400%, that is, for every US$1 invested, you will receive US$4.00 in profit.<\/p>\n

      Meanwhile, the ROI of the physical store would be:<\/p>\n

      ROI = [(9,000 – 3,000) \/ 3,000] x 100<\/strong><\/p>\n

      ROI = (6,000 \/ 3,000) x 100<\/strong><\/p>\n

      ROI = 200%<\/strong><\/p>\n

      It is worth remembering that the end result can vary greatly.\u00a0Everything depends on the action taken, the quality of the planning, and the execution, among other details.<\/p>\n

      The important thing is that with the ROI in hand, it is possible to analyze:<\/p>\n

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      • What was done (or was not done) that could have influenced this result?<\/li>\n
      • Is there a relationship between high-yield investments?<\/li>\n
      • What is it about high ROI shares that can be replicated in others?<\/li>\n
      • Are the campaigns performing similarly to my competitors?<\/li>\n
      • Does your company have better results than others in the sector?<\/li>\n<\/ul>\n

        In the example above, the result was positive, but it can also be negative.<\/strong><\/p>\n

        In these cases, this means that the investment caused the company to lose money.\u00a0Although this is not good news, this information allows the company to investigate the problem and make any necessary changes.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

        Complete guide to ROI: find out if your investments have been efficient by calculating this metric ROI is a financial metric based on the ratio…<\/p>\n","protected":false},"author":776,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-70857","post","type-post","status-publish","format-standard","hentry","category-general"],"yoast_head":"\nComplete guide to ROI - SIIT - Tech Guest Posts<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/siit.co\/guestposts\/complete-guide-to-roi\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Complete guide to ROI - SIIT - Tech Guest Posts\" \/>\n<meta property=\"og:description\" content=\"Complete guide to ROI: find out if your investments have been efficient by calculating this metric ROI is a financial metric based on the ratio...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/siit.co\/guestposts\/complete-guide-to-roi\/\" \/>\n<meta property=\"og:site_name\" content=\"SIIT - 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