The formula for Return on Marketing Investment is:
Posted: Sun Dec 22, 2024 9:45 am
Improving eCommerce customer uk phone number database retention with Barilliance
Barilliance helps hundreds of eCommerce stores improve customer retention.
Some of the effective tools our customers use are
Advanced Triggered Messages - prompt repeat purchases and drive repeat visits with triggered emails, push notifications, and social messages.
Detailed Behavioral Segments - identify and create customer segments and deliver compelling, dynamic messages based on their individual interests.
Personalized Experiences - finally, when repeat customers arrive, we personalize their experience with a variety of personalized content from banners, to message bars, to advanced product recommendations.
ROMI Definition: What does Return on Marketing Investment Mean?
ROMI stands for Return on Marketing Investment. ROMI measures the profit marketing generates relative to the resources invested.
Before we can understand why ROMI is a superior marketing KPI, we need to understand what it is, and how to calculate it.
How to (properly) Calculate ROMI
ROMI = Profit Attributed to Marketing / Cost of Marketing
Note that ROMI focuses on profit, not revenue. For the most accurate measure, you should include all costs associated with the sale. These include:
Discounts & Returns -As we'll see, discounting carries significant costs to profitability and must be incorporated in any real evaluation of effectiveness.
COGS - What it costs to develop/create the product.
Shipping & Fulfillment Costs - This includes any variable costs associated with getting the product to the customer such as shipping, packing, and staffing.
Customer Service/Sales - After sale service and success cuts into the gross profits generated from each sale. You may find customers from certain campaigns cost significantly more after sale resources than others.
Cost of Marketing Campaign - And finally, we get to direct costs of advertising. This includes distribution costs (such as ads), talent to create adverts, and technology required to do so.
“ROMI measures the true effectiveness of marketing investments.” - Barilliance Research
Barilliance helps hundreds of eCommerce stores improve customer retention.
Some of the effective tools our customers use are
Advanced Triggered Messages - prompt repeat purchases and drive repeat visits with triggered emails, push notifications, and social messages.
Detailed Behavioral Segments - identify and create customer segments and deliver compelling, dynamic messages based on their individual interests.
Personalized Experiences - finally, when repeat customers arrive, we personalize their experience with a variety of personalized content from banners, to message bars, to advanced product recommendations.
ROMI Definition: What does Return on Marketing Investment Mean?
ROMI stands for Return on Marketing Investment. ROMI measures the profit marketing generates relative to the resources invested.
Before we can understand why ROMI is a superior marketing KPI, we need to understand what it is, and how to calculate it.
How to (properly) Calculate ROMI
ROMI = Profit Attributed to Marketing / Cost of Marketing
Note that ROMI focuses on profit, not revenue. For the most accurate measure, you should include all costs associated with the sale. These include:
Discounts & Returns -As we'll see, discounting carries significant costs to profitability and must be incorporated in any real evaluation of effectiveness.
COGS - What it costs to develop/create the product.
Shipping & Fulfillment Costs - This includes any variable costs associated with getting the product to the customer such as shipping, packing, and staffing.
Customer Service/Sales - After sale service and success cuts into the gross profits generated from each sale. You may find customers from certain campaigns cost significantly more after sale resources than others.
Cost of Marketing Campaign - And finally, we get to direct costs of advertising. This includes distribution costs (such as ads), talent to create adverts, and technology required to do so.
“ROMI measures the true effectiveness of marketing investments.” - Barilliance Research