What Is ROI and How Is It Calculated?

As this year winds down, it’s time to look back and assess the accomplishments and health of your company. Really, the question is: “How much did I get for what I invested?” — whether it’s your time, money, training, advice, etc. In other words, Return On Investment (ROI).

It’s important to look at ROI when planning your marketing for the upcoming year.

All too often people look at marketing ROI in terms of response rate: in other words, “I sent 10,000 postcards and only got 39 responses, not so great.” This is wrong thinking.

You have to realize that ROI is measured in dollars. Let’s say you spend $2,150 on your marketing campaign of 5,000 postcards and you get 10 calls. Doesn’t look like much. But out of these 10 calls, you close 6 clients and get immediate sales of $12,000. That’s marketing ROI! And that’s not even taking into account future sales to those 6 new customers. It could add up to thousands more.

Obviously you need to track your response to find out what about your campaign is successful.

One of my long time clients, Measurable Solutions, a consulting company that primarily assists physical therapy practice owners, has experienced the powerful return of postcard marketing firsthand.

Their CFO, Jeff Lee says, “The money we have put into the postcards is like a drop in a bucket compared to what we get back. We know that the more promotion we send out, the more return we’re going to get. It always works.”

From sending 7,500 postcards, we’ll get an average of 15-20 leads. Out of these leads about 5-7 people attend our seminars and pay $1,700 a piece. From there, we close an additional $30-40,000 for services.”

That is excellent marketing ROI.

No matter how big or small your business is, you should be tracking your ROI — it can tell you so much!



  • Great article. As a business owner and marketer, the only thing that matters at the end of the day is ROI. How much was spent and how much of that came back? All the other metrics and statistics are useful, but secondary to the importance of ROI.


  • Exactly, Ben! You can always calculate the success of your marketing by your ROI. Thanks for reading!

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