Return on Investment (ROI) is the most useful and effective marketing measure as it enables businesses to compare the overall investment made in a project with the total returns on investment generated from it. Return on investment can also be customized to represent the significance of short-term and long-term profits for a business during a fiscal period.
A majority of businesses consider ROI measures to be of immense importance in the planning and implementation of effective marketing initiatives. During the planning phase, attention is given to essential considerations such as market conditions, customers’ needs, competitive activities, etc. This helps a business optimize its marketing effectiveness. Here are some important benefits that effective ROI strategies offer businesses:
Executive-level participation – The manifold advantages of a ROI measure extend throughout the various levels of a company. Despite this fact, active participation at the corporate level is the only sure shot way to maximize profit levels. therefore, by incorporating ROI measures in the budget allocation process, company executives can maximize profit levels. Furthermore, corporate-level participation also encourages the marketing team to set expectations and milestones, define a set of standards. This encourages the team to work on how the right decisions are made.
ROI is one of the most effective marketing measures as it ensures that every penny that a business invests on marketing and advertising campaigns is directly translated into profits. ROI is usually calculated in the form of numbers, which essentially represent a ratio of the amount of money gained by the business in relation to the investment made by the business. Moreover, the simple formula can even be directly applied to compare different types of marketing.