local media insider
Example

Use this ROI calculator

A great tool for establishing goals and boost retention

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Merchants want to land in this quadrant.
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Attached is a simple ROI calculator.  Please open the attachement to the left (there are two versions, xls and xlsx), and use these instructions below to operate the caculater:


1. What do you want to be able to measure, ie phone calls, emails, Facebook fans, walk ins, visits to the website, etc.

Delete units of measurement that do not apply. Keep those you are tracking, you will plug in the numbers for the units that do apply.

2. Estimate the dollar value of  whatever units (fans, calls, etc.)  of each item you have chosen to measure. 

For example, if there are 100 fans, or 1000 email names, how many of these does he/she think will buy?

Use rough estimates (half, maybe one in ten, etc.) and notate this as a percentage in "Esimated%sold" in column 2. 

For new services such as Facebook fans, you start by looking at national statistics, but keep estimates low. Base the percentage on the merchant's own estimate, based on their own schedule of sales and promotions, if they had, say, another 100 fans, emails, etc.

3. Ask the merchant how much a typical customer spends annual
ly. If they don't know, break it down by asking what the typical sale is, how many customers come back and, typically, how many times. Creating this annual value will help the merchant understand their own business. Plug this number into to column 4.

Typically merchants tend to over estimate repeat business, so this will usually work in your favor.

4. As the results come in from the campaign, plug them into the  # conversions in column 1. The calculator will provide an estimate of total annual net revenues after the cost of advertising and the ROI, expressed as a percentage. These numbers are lower right in green.

The ROI calculator will automatically  total the revenues and net margin  from the campaign.

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