ROI : The Real Deal when it comes to the digital world!

What is ROI?

Return On Investment (ROI) is the term used to calculate the effectiveness of the money invested in the campaign. Using ROI, the profit that was derived from the campaign can be figured. Basically using ROI you will know if you’re hitting the right goal such as brand reach or purchases or brand awareness etc.,

How to calculate ROI?

In order to calculate ROI, you need to know how much you have invested in the project and how much has it returned in terms of profit.The budget of your digital marketing campaigns can vary depending on your campaign which could be content creation, social media advertisement, brand awareness, influencer marketing. Once you figure out the type of campaign and it’s budget , you can calculate the ROI based on the following formula:

Digital Marketing ROI = (Sales Growth – Marketing Cost) / Marketing Cost

What is a good ROI?

Good ROI is where you’ve earned more than the amount you’ve invested. Generally , a good ROI is always in the ratio of 5:1. Basically you’ve invested 1 rupee and invested 5 rupees out of it. That’s the most ideal one, but if your ROI is somewhere in the ratio of 2:1 or 1:1 , there is always scope for improvement.

How to improve ROI?

It’a always better to determine some kind of baseline for ROI. But it’s always better when we try and improve it. Some of the steps you can follow to improve ROI are:

1) Set up tools to track your website
Configure Google Analytics to see how well your website is performing

2. Set up tools to track your social media
Configure tools to track your social media channel insights

3 . Use the insights from the tools to determine your current ROI
Using the formula mentioned above and the insights that you have received from the various tools you can calculate the ROI.

4 . Set up a improved ROI goal
The goal is to always get better. Work on that!

Tips to increase ROI with Marketing Analytics

You’ve determined your goal, you know the current ROI of your campaign, but that should never be enough. There is always room for improvement. Following are a few tips and strategies that can help you maximise your ROI, because in the digital world, there is no such thing as enough:

Measure the right metric

Measuring metrics is important but at the same time you need to know the metric relevant to your campaign. In many cases, there are metrics that are irrelevant to your campaign but you tend to focus on those, these kinds of metrics are called vanity metrics. They’re basically empty metrics that are not helpful when it comes to determining ROI.

For example, if you’re looking to improve sales digitally , the metric you should be looking for is Revenue. In such cases, looking for metrics like followers or reach may not be of any use. Remember, you can keep track of multiple metrics but make sure they’re relevant to your marketing goal.

Figure out areas of improvement:

Find out the metrics that are underperforming and take steps to improve it. It’s always better to trace the steps of the customer journey to see where exactly things are going wrong.

For example , if a customer visits your website multiple times but still does not make a purchase, you can check on how to improve the CTR or if you want to bring back the customer that has already made a purchase on your website, you can work on how to retarget customers with luring offers to make a conversion.

Create content that gives higher value

So you’re running social media campaigns and you are unhappy with how the customers are reacting or interacting with the post as you’d hope it would be, it’s time to change the brand tone and voice of the brand.

If your Social media page is all about one tone single posts or simple product pitches , it’s not necessary that it always works. Sometimes customers expect more, understand what they want either through FAQs or surveys and accordingly post content that will help them interact better with the brand.

Provide different kinds of offers

Some offers work but if you constantly post the same offers there are chances the interest of the customer might wane. In such cases, you need to experiment with offers keeping in mind the ROI. Although the ROI was fine with the previous offers, new kinds of offers always attract customers. It doesn’t have to be something big all the time. Examples of a few offers could be:

  • Free Delivery
  • Limited time offer
  • Special offers for loyal customers
  • Coupon Codes etc.,


Try new channels for better revenue.

It’s true, your brand doesn't always have to be on social media channels but there might be cases where its presence might impact the ROI if it is omnipresent. In order to improve your ROI, try new channels. For example , if your brand is only on Instagram , then you can set up shop on Facebook or grow organically on Twitter driving them to your website.

If you are unsure as to which social media channel to test, create a buyer persona and see which channel it fits. Also, you can understand from your competition and see where they’re attracting more customers and act accordingly.

Make the best use of Marketing Automation Tools:

What is the entire purpose of ROI? To calculate how much you have benefitted from the campaign. Some campaigns focus on increasing the number of followers, some focus on sales thereby increasing the revenue, some focus on creating an awareness of the brand. For a better ROI, cost benefitting processes should be implemented. Certain repetitive tasks can be replaced with automation tools such as:

Facebook Ads Manager: Helps you manage campaigns and schedule posts. From the ads manager you can find out the underperforming campaigns and accordingly take measures to either improve them or discard them.

Facebook ChatBots: can be integrated in websites that will directly be connected to Facebook Messenger.

Other tools include Hubspot Marketing Automation, DirectMail and a lot more. It's the world of automation and there is softwares to run campaigns and perform other tasks.

ROI can be improved if you set goals, work on them, figure out the right metrics and use the right automation tools. If you are always experimenting and trying new methods on improving ROI, then you can always help out your clients.