Good ROI vs. Positive ROI

In our last post, we raised the question of whether spending $15,000 to increase sales by $66,666 would be a good return on investment. The answer is … a definite maybe!roi

Let’s say that you’re a non-profit, and the “sales volume” we’re talking about is donations. In that case, because there’s no material cost involved beyond the marketing investment, it would be a very solid ROI, close to 350%. But what if you’re a landscaper, and your labor and materials cost generally runs around 75% of sales. In that case, your $66,666 of incremental sales would produce approximately $16,666 of incremental profit, so you’d essentially be spending $15,000 to generate $16,666. That’s a positive ROI, but it’s probably not what you’d call a great return.

There are two fairly obvious solutions to this “problem.” One is spending less to get the same result. The other is getting better results from the original budgeted amount. We can help you to address both approaches with our creativity and efficiency. Let’s talk!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s