How to calculate a return on investment for your marketing campaign?

How to calculate a return on investment for your marketing campaign?

Here at Data Bubble we will ask you the difficult questions. And yes we will event sometime turn away business!!!

Why you ask?

Because if you aren’t going to get a good return on investment then we will tell you so.

This is what happened earlier on this month a client wanted to so a mailing campaign to a list of new prospects. His was selling an item at £20 so his return on investment would need to be very high to make the campaign a success.

He then asked me why he hadn’t been told this by other list brokers?  I said I couldn’t comment on other companies however reassured him that we a different from other companies.

I was please to let the prospect go, safe in the knowledge that he knew we are honest, trust worthy and want what is best for his business.

So what is return in investment and how do you calculate it?

A common definition of Return on Investment (ROI) involves looking at the cost of a marketing campaign relative to the profit generated.

For example

You put £2000 into a marketing campaign

You sell 50 items at a profit of £100 each making a total profit of £5000, but this profit is before the cost of the campaign so take off the campaign costs I.e. £5000 profit less cost £2000 = £3000

Your Return on this Investment is £5000 divided by £2000 x 100 = 250% ROI.

Working out your return on investment ensures that you are spending your money on the best form of marketing.

If you are looking at doing a marketing campaign then you may be interested in our blog 10 Steps to creating a successful direct marketing campaign to attract new customers

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Or call us on 01274 965411

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