subject: What Is Roi? Calculating The Return On Investment Of Your Online Business Venture [print this page] What is ROI and how do you measure it in online business ventures, including social media marketing? ROI is a common business term, used more and more as businesses and corporations develop online business ventures, social media campaigns, or dip their collective toes into the social media waters.
ROI means "Return On Investment." It measures whether the amount of money you spent was more or less than the money you earned. That is, if you spend $1,000 on a marketing campaign, and you earn $5,000, your ROI was 5:1. For every dollar you spent, you made five.
The problem is that many of these executives are distracted by the latest shiny object, and see social media as the newest toy to be played with and discarded when the next shiny object comes along. (We saw the same thing happen in the 80s and 90s with management books. Every new book replaced the old one, and many corporations lost focus as they bounced from one management guru to another.)
This ultimately hurts social media because the execs don't fully grasp the profitable ROI that can come from a successful social media campaign. They don't take the time to measure the return on investment, and thus dismiss it with a wave of the hand, calling it a fad, saying it will never last.
But how can businesses start profiting in online business ventures? How can they know whether their social media campaigns are producing a positive ROI or not? And if you're the one launching the campaign, how can you prove to your managers that this is important and successful?
Measuring ROI starts with the goals of the campaign. What are your reasons for being on Facebook, on Twitter, or starting a blog? What do you hope to get out of it? Create real goals that can be measured and tracked. "Improve 4th quarter sales by 10%" is a good goal, "add 50 new names to sales pipeline in 60 days" is a good goal. "Enhance customer relationships" or "build our brand" are not.
Step two of measuring your ROI is to determine the tool you're going to use to measure it. There are several good free and paid analytics packages, including Google Analytics and StatCounter.com on the free side, or Yahoo Analytics, HubSpot, HitTail and Active Conversion on the paid side. Your web host may also have some basic analytics available too. Find one that will let you measure the various clicks and visits to your satisfaction.
Third, start looking at the conversions in your online business venture. How many people are coming to your website? How many of them are buying? If you have a good shopping cart software package, check out how many people abandon the shopping carts. If your conversion rates are low, can you add a Buy Now button or other call to action? If people are abandoning your shopping cart, is your process too clunky and complicated? Make some changes, keep an eye on the analytics, and see if your ROI improves.
The fourth step in measuring your return on investment is to see where your best results are coming from. Have you used social marketing applications like Twitter and Facebook to promote your online business venture? Check your analytics to see where your biggest results are coming from. Maybe 30% of your results are coming from Twitter, and the remaining 70% are coming from Facebook.
Now you have a decision to make: do you drop Twitter from your social media campaign and focus solely on Facebook? Or do you plow more time and resources into Twitter and see if you can bring the numbers up. Don't just make a rash decision. Do a before-and-after test to see which one yields the better results. Then, do another test, and see if you can improve on that. Once you find the formula that works, leave it alone, tweaking the minor details every once in a while.
Thanks to setting your goals, analyzing your results, and testing different variables, you can achieve your ideal ROI and show the success of your online business venture, which will hopefully keep company executives from the distraction of the next shiny object that comes their way.
Resource Box
What is ROI? Return On Investment- return on your online business investment for example. Is your website a lead generation website? Do you have a lead generation strategy? Are you happy with your website ROI? More inbound marketing leads equals more business leads. Website business leads provide quality lead generation which translates to money to your bottom line. Rostin Ventures will provide you more on ROI and how to generate quality business leads through a unique SEO Online Marketing Strategy.
Want to start an online business venture, but don't have the business start up funding?
by: MarkKemp
welcome to Insurances.net (https://www.insurances.net)
