To offer an instance, if a marketing campaign which prices £1000 to run generated gross sales of £8000, on the face of it, it might look like a profitable marketing campaign.  Some individuals might contemplate this an 800%, or Eight instances, ROI.  Nevertheless, if the revenue margin on each gross sales is just 10%, then that marketing campaign will even have solely generated £800 revenue.  The marketing campaign itself price £1000 to run so in actual phrases you might be £200 worse off for working the marketing campaign within the first place.

All the time make sure that whoever is doing the analysis of the marketing campaign, whether or not it’s an in-house marketing or finance particular person, or it’s an exterior company reporting again to you, that they’re reporting again ROI precisely.  In the event that they do not know what your common revenue margin is, they will’t be!