The importance of ROI in marketing

When a company invests in something, it seeks to obtain a satisfactory cost-benefit. In marketing strategies, this should happen frequently, mainly because there are several strategies in which to invest resources. The challenge lies in identifying which of them can provide the best performance to achieve the expected results.

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ROI monitoring of a campaign can help companies define which strategies work best, based on budget, and audience, among other factors. Each scenario will influence the strategy you have chosen, and the ROI metric will allow you to know if you are directing your marketing efforts on the right path.

Measuring ROI in marketing is essential to continue investing strategically, ensuring better budget management and results aligned with the company's objectives.

In this article, we are going to address the importance of ROI in marketing and how it manages to position the area or industry as a strategic partner.

What is marketing ROI?

ROI stands for return on investment. This metric calculates how much a business can earn from investing in a specific marketing strategy. It is possible to develop various campaigns, including marketing actions, by email, content marketing, and search engine marketing.

Each one requires an investment that can generate a profit, which in turn will depend on several factors. By measuring the ROI of the strategy, you can find out if the chosen path provides a good profit margin or not.

How to calculate ROI in marketing?

The ROI calculation can vary in some companies, especially if they decide to include additional factors to know the return that the investment brought. However, the standard formula that companies use is usually the following:

ROI = income - investment / investment

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Importance of ROI in marketing

The main objective of any marketing strategy is to increase profitability. For this reason, it is important to determine which marketing actions are more profitable, considering the initial investment and the final result.

ROI results allow you to find out what type of advertising your audience is most likely to interact with and, therefore, convert. Based on ROI analysis, ROI in marketing can be optimized or completely modified by the actions executed in a marketing campaign. Knowing in detail each action will allow evaluating the profitability of the investment.

Another reason ROI is important in marketing is that it allows you to understand the behavior of your audience. In addition to considering the numbers coming from the investments, this metric clarifies what type of strategy has the best impact on the audience.

Also, keep in mind that marketing ROI should also include increased engagement, brand awareness, and customer satisfaction. True marketing ROI goes beyond revenue figures and also considers long-term benefits.

Identify the metrics you will measure before executing each marketing strategy. This way, when you launch your tactics, you will have an idea of what constitutes a positive return, as it can be different for each company.

A highly effective, low-cost marketing strategy that often produces positive marketing ROI is voice broadcasting. Use voice broadcasting to call all your customers simultaneously with your promotional and engagement messages, and reduce costs by saving time and resources on manual calls.

Advantages of measuring ROI

Correct and continuous measurement of ROI allows your company to achieve incredible advantages. More solid strategies and better budget allocation are the main ones, but there are also others that need to be highlighted.

1. Invest more adequately in the marketing budget.

Marketing budgets are often low. Therefore, it is essential to know how to use this money, doing it in the best possible way. If a marketing team measures the ROI of their campaigns, they can understand which actions require less investment to generate a good return.

This knowledge can generate great budget management and, with it, better results. After all, the decisions will lead to strategies that work better.

2. Make more strategic decisions.

No matter how many effective marketing strategies there are, it is impossible to invest in all of them at once. The ROI gives you the possibility to know, based on exact numbers, which ones should receive the highest percentage of the budget.

Strategic decision-making, based on data, is increasingly necessary in the business world. Therefore, ROI must be considered when deciding how to conduct a marketing campaign. Thus, the marketing team can choose the most appropriate strategies among all the options, investing the budget appropriately.

3. Achieve the goals.

Marketing objectives will always make marketers think about the best strategy to achieve them. This job can become much easier if there is ROI tracking. In addition to showing which strategy has the best cost-benefit, the metric indicates which one generates the best results.

It is possible to create campaigns using accurate data, which is sure to lead to the results your business wants. Tracking metrics with the help of good tools is essential to have increasingly accurate reports and make the best decisions.

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In a nutshell, the importance of ROI in marketing is that it is an indicator that allows you to assess whether your marketing efforts are profitable for your company. In addition, it favors decision-making when investing, since it helps define the best strategy that generates the highest income, based on the investment made.