Return On Investment (ROI) is where you spend £’s with an expected return. For businesses, this expected return is usually financial however it can also be measured in other ways; growth, awareness, market size, etc.
The majority of the businesses we work with are looking for a financial return on their investment and the types of investments that are predominantly made with us are; websites, paid advertising, email marketing, bespoke development. Each of these investments have different values, and each value is different depending on the business needs and requirements. What remains the same is that we are always seeking out ROI for the businesses we work with. We’ll challenge our clients around ROI as ‘I just need a website’ is not a good enough reason to invest – not in our eyes anyway.
This could be called ‘Setting ROI’ or ‘Creating Project Goals’ or ‘Success Aims’, or another fancy name, but basically it’s putting down on paper the return that a business wishes to receive. For example: a wine merchant is investing £10,000 in an eCommerce website and would like to see a sales return of £10,000 within the first 6 months and then a continued sales return of £20,000 within the 3 months afterward (9 months from site launch). Setting these goals means all stakeholders on a project have something to aim for, and most importantly, measure success or failure against.
We often find that ROI is rarely considered, and when it is, it can be unrealistic. Investing £500 in email marketing over a 6 month period but expecting £100,000 in return is highly unrealistic. Setting unrealistic goals will always end up in failure but this doesn’t mean it’s a case of setting goals that are easy to achieve, it’s a case of setting goals that are ambitious but achievable.
What do you want to achieve from this project? How does this project fit into your overall business plan? What are your business goals for the next 12 months? These are questions we ask at the beginning of every project. Firstly, this information is vital for us to understand about a business and the ambitions of that business. Secondly, if none of these questions have been previously considered then it means ROI hasn’t been considered and potentially the project isn’t worth investing in. We tell clients this, a lot as taking on a project that we don’t think is viable will mean a failure at the end of the project. This leaves everyone with a sour taste in their mouth, especially those that have sunk money into the failed investment. This leads us onto our next important point…
Delivering ROI is important for us as a business. We believe in measuring the success of our work and then demonstrating this success. There’s nothing better in business than phoning a client and telling them that they have increased their turnover by 20% as a direct result of an activity that we have done. There’s also nothing better in business to continue a working relationship than demonstrating ROI. If you see a direct result in your business goals from working with us, then I’m sure you’d continue to invest in us.
Make sure that you understand what you want to achieve before entering into any business relationship that requires you spending money. Work with your agency, especially your design/development/marketing agency, to discover the ROI that you’re looking for and is realistic to achieve. Doing this means that all parties involved understand what is expected. Everyone being on the same page and working towards the same goal will increase chances of success and increase the ROI received.