If you want to figure out how to calculate ROI for your business you’ll need three essentials:
What's so important about those three things? Let us explain...
There are literally hundreds of tools that claim to help you uncover and/or display ROI metrics. You can put aside all the shiny dashboards, expensive analytics portals and social measures trackers, the real essentials are:
- Google Analytics for your website (find out what metrics are important to measure here)
- Native platform metrics for social media
- Excel, Google Sheets or the equivalent
Once you’ve defined what metrics you need to measure ROI, these tools will allow you to gather the data and put them into a spreadsheet. Update this monthly and you’ll have a clear and accurate picture of how your measures change over time and therefore the return on the time and/or money you’ve spent.
Having a skeptical mind and the tenacity to integrate your data accurately is an essential.
Don’t assume that Google or any other software provider will do this for you. Analytics doesn’t always track visitors correctly out of the box, Facebook has misreported video stats, MailChimp click through data doesn’t alway match anything else . . .
You need to apply common sense to your data and be tenacious in following this up. Maybe it's not tracking correctly or your sales figures don’t match. Discrepancies can mean garbage data, and you know what they say about garbage in . . .
You also need to be tenacious in defining your core metrics - using something like a measurement framework - to ensure what you measure is actually business critical. Vanity metrics or easy measures won’t help you in the long term. If you don't know what a measurement framework is, or are looking for some help on creating your own, you can download the handy guide below.
Analysing ROI isn’t difficult, but it is time consuming. You need to dedicate time to it, regularly.
Gathering data in a measures document on a monthly basis works for us, but it will depend on your business. Don’t get hung up on short term fluctuations (back to being skeptical); measure regularly, but not too regularly.
Taking TIME to collect your data using TOOLS and applying TENACIOUS thinking to the analysis is all you need to calculate ROI!