So what exactly is ROI?
Return on investment is basically what it sounds like. The three letter acronym is simply a short form way of asking the question “What did I get in return for what I invested my money in?” The obvious way to determine your ROI is to subtract what you have spent from what you have gained. This will provide you with the exact amount of return you have received.
Another way to calculate ROI is to divide your gains by the cost of your investment. This will give you the percentage of your returns. Naturally, a positive number indicates that you have earned money and, as a result, enjoyed a successful return on your investment. Of course, a negative number indicates that you have lost money and that you were unsuccessful in the particular business venture that you engaged in.
What are the advantages to calculating your ROI?
Well, it’s certainly important to know whether or not you are spending money in the right places. Obviously, losing money is part of no sound business strategy. If you find that you are losing money in particular areas of investment, calculating your ROI will help you to cease such ventures. On the flip side, if your strategies are proving lucrative, you’ll know to invest further in those avenues.
Marketing, for example, is one of the top methods that businesses use to grow themselves. The objective, of course, is to get the word out about your brand, product or service in hopes to have a direct impact on the buying public. When you launch a campaign, the hope is that it will generate greater interest in your company and that more customers will come your way. A good marketing strategy is one that earns a company more money than it spent on advertising.
In what others ways you can determine ROI?
Naturally, companies spend money in a variety of ways in order to boost revenue. Buying new equipment, ordering new inventory, hiring new employees and adding new departments are among them. In some cases, it can be harder to calculate ROI because of the difficulty in determining exact economic results of your move. For example, some new equipment may not directly generate new sales, but they give you the ability to run better your business.
New inventory, on the other hand, is easier to calculate. It goes without saying that you sell your products are marked-up prices so that you can easily determine your profits. However, you must take into consideration such things as shipping costs and even your advertising budget to determine if ordering and selling the new products are making your business any money.
At SIClytics, we know that calculating your ROI can make your business more successful in a short period of time. As a result, we offer Call Tracking services that specify which of your advertising methods generate the most phone calls to your business. By pinpointing which of your marketing strategies encourage the most calls to your company, you will much better understand which advertising methods are the most profitable. This helps you to better manage your overall advertising budgets, greatly improving your ROI!
For more information about our Call Tracking services, please don’t hesitate to call us at 1-877-374-6003 or email us at sales@SIClytics.com.