Why ROI is really alive and well?
Posted: Tue Feb 18, 2025 10:30 am
ROI is a buzzword that most people understand. It's also an easy number to calculate, if you use the right numbers.
To understand why the metric is so important, it is first necessary to understand where the most common mistakes are made during its calculations:
ROI is measured too quickly within the sales cycle
KPIs are confused with real ROI
Pressure makes marketers demonstrate faster performance
The reality is that ROI is based on when the return is achieved, and that can only be achieved once the customer has gone through the entire sales funnel.
If you push a measurement before the sales cycle is complete, you are not actually measuring ROI.
It's important to understand the actual length of your sales cycle. This can vary from months to years depending on a number of factors (B2B vs B2C, product cost, industry, etc.). If you don't allow this cycle to complete, you're dealing with bad data.
KPIs, also known as key performance indicators, are used as an ROI rather than what they are: specific metrics to help with optimization.
Many digital marketers measure ROI in the first month, even though they know their sales cycle is six months. That way, they are getting a KPI on partial results over a certain period, but not the big picture, which at the end of the day is what ROI should deliver.
lead generation
Depending on everything else that's going on and what tools you have to drive your buyer persona through the sales funnel, a lot can happen in the second or third month of the sales cycle.
Estimating it in advance will result in the result being lower than its true potential. This can reduce marketers' confidence and even discourage them from a certain strategy.
Marketers work hard to establish ghana phone number list strategies and launch campaigns that will result in a solid ROI.
The problem is that many of them rush to report due to internal pressures and tight budget allocations. They calculate too quickly and are forced to change their route because the return is not as strong as it should be.
When ROI doesn't support what marketers envision and perceive about the campaign, they abandon the metric altogether.
Instead, they choose insufficient metrics to prove that a campaign is working, such as increased website traffic or revenue growth over a given period. ROI is alive and well, but it must be used correctly to demonstrate true return on marketing investment.
Knowing when you will see the return after making the investment is essential.
To understand why the metric is so important, it is first necessary to understand where the most common mistakes are made during its calculations:
ROI is measured too quickly within the sales cycle
KPIs are confused with real ROI
Pressure makes marketers demonstrate faster performance
The reality is that ROI is based on when the return is achieved, and that can only be achieved once the customer has gone through the entire sales funnel.
If you push a measurement before the sales cycle is complete, you are not actually measuring ROI.
It's important to understand the actual length of your sales cycle. This can vary from months to years depending on a number of factors (B2B vs B2C, product cost, industry, etc.). If you don't allow this cycle to complete, you're dealing with bad data.
KPIs, also known as key performance indicators, are used as an ROI rather than what they are: specific metrics to help with optimization.
Many digital marketers measure ROI in the first month, even though they know their sales cycle is six months. That way, they are getting a KPI on partial results over a certain period, but not the big picture, which at the end of the day is what ROI should deliver.
lead generation
Depending on everything else that's going on and what tools you have to drive your buyer persona through the sales funnel, a lot can happen in the second or third month of the sales cycle.
Estimating it in advance will result in the result being lower than its true potential. This can reduce marketers' confidence and even discourage them from a certain strategy.
Marketers work hard to establish ghana phone number list strategies and launch campaigns that will result in a solid ROI.
The problem is that many of them rush to report due to internal pressures and tight budget allocations. They calculate too quickly and are forced to change their route because the return is not as strong as it should be.
When ROI doesn't support what marketers envision and perceive about the campaign, they abandon the metric altogether.
Instead, they choose insufficient metrics to prove that a campaign is working, such as increased website traffic or revenue growth over a given period. ROI is alive and well, but it must be used correctly to demonstrate true return on marketing investment.
Knowing when you will see the return after making the investment is essential.