According to Daniel Kehrer, writer at Forbes, marketers' beloved "ROI" isn't just an overused buzzword. It's a concept that's misapplied, misunderstood and misused. In other words, marketers continue to reference “ROI," but they’re applying it, measuring it and using it incorrectly. It's likely that ROI is not always the process or term you should use to measure your marketing impact. It's not that ROI is a bad term, it's just a misapplied one. If you learn how to use and apply ROI correctly, then you’ll see the true numbers and how your marketing investments are really doing. Or, you might actually need to combine different metrics, or use ROMI (return on marginal investment) to see the impact of your efforts.
The old saying is you can make statistics tell any kind of story. ROI presents a similar scenario. If you’re not a numbers person, understanding exactly how to use or apply ROI may make your eyes glaze over. What every business needs to know—the bottom line—is how their activity whether it’s Direct Marketing, Facebook, Twitter and any other strategies they're implementing, is truly performing or not. Create marketing goals and a simple, easy to understand (and use) system for measuring whether that program meets your goals. ROI is simple, as are other measurements, but they each have a very specific purpose. Be sure you understand what you’re measuring and the value (not just in dollars and cents) of your method, and you'll be on track to improve your marketing. Don’t just do what everyone else is doing because it sounds good. Like the Kehrer says, if you want to know more, check out this video on the essentials of advertising.
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