May 29, 2012
Chart

Marketing Research Chart: Formal methods for calculating ROI yield strong results

RSS   Free Newsletters  
SUMMARY: We asked 2,735 marketers to tell us about their organization’s measurable ROI in 2011. Survey responses revealed an average of 77% ROI, with the largest number of respondents reporting approximately 100%.

What are the indicators for higher ROI? Our study suggests strategic processes for funnel optimization and a formal method for calculating ROI.
by W. Jeffrey Rice, Senior Research Analyst

Chart title: Email marketing ROI as a percentage reported by survey respondents

Q. What is the estimated ROI from email marketing programs for your organization?

View Chart Online

Click here to see a larger, printable version of this chart



As we discovered in this year’s study, the email process of achieving or increasing measurable ROI was the third-greatest priority for marketers. A textbook calculation formula for return on investment is:

ROI = (Gain from Investment – Cost of Investment) / (Cost of Investment)



Each chief financial officer will vary slightly in how he or she calculates the gains and costs of the investment, so it is crucial to meet with the finance department before beginning the exercise to ensure consistency.

Respondents reported an overall average of 77%, while the largest percentage of respondents (22%) reported double the organization’s money for every dollar invested.

Our research suggests establishing a formal, repeatable process for funnel optimization and ROI. As an organization matures from the Trial phase to the Strategic phase, its email marketing program ROI will rise.
  • Marketers in the Trial phase of email marketing maturity report an average 50% ROI

  • Marketers in the Transition phase report an average 62% ROI

  • Marketers in the Strategic phase report an average 78% ROI

For additional research data and insights about email marketing, download and read the free Executive Summary from the MarketingSherpa 2012 Email Marketing Benchmark Report – Research and Insights for Engaging Email Subscribers.

Useful links related to this research

2012 Email Marketing Benchmark Report

Marketing Research Chart: Email marketers who quantify ROI are in the minority

Email Marketing: Show me the ROI

Email Marketing: The 3 most successful tactics of 2011 (with case studies)

Complimentary Download: Automated Email ROI Worksheet



Improve Your Marketing

Join our thousands of weekly case study readers.

Enter your email below to receive MarketingSherpa news, updates, and promotions:

Note: Already a subscriber? Want to add a subscription?
Click Here to Manage Subscriptions


Todd /article/formal-methods-calculating-roi-yield