Return On Investment

Return On Investment

Commonly noted as ROI, is a performance metric that can be used to evaluate the efficacy of a certain investment, and to compare the cost effectiveness of multiple investments. This allows marketers to evaluate whether their marketing efforts are profitable and worth continuing, or if they might need to adjust their approach, content, or branding to increase their profits. To calculate ROI, investors divide an action’s benefit or commercial returns by the action’s cost. (ROI = investment’s benefit / investment’s cost)

For email marketing purposes, ROI might refer to the profit netted by a single email communication. Cost may include the time spent designing email templates and formulating content as well as subscribing to any mass email services. Benefits will typically be the purchases made from customers directed to the website by email communications. Typically, ROI on email marketing campaigns are high. However, marketers may try to improve their results by changing templates, including more rich media, clearer calls to action, or more visible links.

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