ROI is something that defines your path, creates your strategy and executes your planning. Every company has a different set of goals and ways to achieve ROI. Some rely on marketing, no matter what form they are in. Some try to look into lessening the expenses to have a great ROI number at the end of the year.
In either case, one has to understand the importance and true essence of the word before diving into the pool.
ROI differs based on the business and industry you are associated with. Simply put, Return on investment (ROI) is the benefit to the investor resulting from an investment of some resource.
ROI is a driving force that lets us evaluate how efficient the investment was at that time of the year, for that business type. In economic terms, ROI is the basis of evaluating the current and future planning regarding profits incurred from capital invested.
Return on investment isn’t necessarily the same as monetary profit. ROI deals with the investment you have done in the company, and the return you have realized based on the money investment in the business. Profit measures the performance of the business.
ROI is used in different ways to gauge the profitability of your business. For example, you can measure the performance of your company based on the ROI results, for instance, you can measure the performance of your firm’s movement in the market, pricing strategies of your product, capital expenses, marketing, employee retention, the business development plan, and most importantly how entering into new markets have provided results in favor of the investment.
Marketing decisions play a very important role in connection to ROI. These decisions influence the investment utilization in conjunction with the company’s long term strategies and goals (sometimes short term as well). Several marketing tools and techniques are used to maximize the ROI of an investment. Some people rely on social media and some are relying on email and SMS marketing.
What is important when it comes to marketing are two things: content, and medium. Kraft foods have been doing content marketing for decades. They used to publish a family magazine which is mailed free of cost to selected households in US, which was later converted to paid circulation and was generating clients and a satisfied customer base.
A few years ago, Kraft changed its marketing model. They now generate 1.1 billion advertisements in a year. This has increased the ROI to 4 times more than previous models of engaging clients.
Kraft’s key to success was content. Thinking of content and transforming it to paid advertising resulted in a wider viewership, and more inclination of masses towards the product.
Email marketing is also a great way to maximize your ROI. It all depends on your target audience and your product/service. It mostly works with home based consumers, or people who are looking for products less expensive as compared to what they see every day.
In some businesses it is easy to measure the results of ROI. For example, when you click on an advertisement and buy the product, it lets the person know the ratio of clicks per purchases. For some businesses it is not that easy. It might take more modeling and analytics.
In today’s world, we have several social media tools available to reach a wider market, and bigger fan following. Twitter, Facebook and other social media actually have led many marketers to move towards free marketing, as every 5th person in this world now have a smart phone and is able to access these social media sites.
No matter what marketing tactic you use, the following quick tips should be kept in mind to maximize the ROI:
Touch the Personal cord by staying “Professional”
Your tone should be professional, but your message should be personal. You can do it easily, If you put yourself in your customer’s shoes. Targeted audience: What type of product and people community you are targeting? You should also use words carefully, and it should target the essence of the thing that they require, or they miss.
Make sure its not boring:
Think, think and think again. Print, electronic, or personal correspondence: you should make it exciting and letting others feel this is what they were waiting for. If you don’t get key information correct, you’ll lose them.
Marketing and re-marketing
Don’t be afraid to reach out more than once. People forget about things when they don’t see it. Depending upon your targeted audience, make sure your marketing and your approach to customers are without a gap. This way, you will be in the news, in their minds and in the list. Also, depending you’re your product, the relevant marketing tactic should highlight product new features, new branding or new requirement coverage that takes care of the issues they faced with the previous model/version/color etc.
Remember, it’s the small changes here and there that creates a big impact. Always research and re-research to make sure you are to generate the planned ROI, aligned with the company’s long-term goals.