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What’s Your ROI?

What Is Your ROIWhether folks tell me their ad campaigns are going well, or not as well as they like, I immediately ask “what’s your ROI?”

“ROI” is your “return on investment.”

This is a pretty standard measure of how successful any particular ad campaign is, or more broadly, how successful your business is.

The funny thing is, though, while people are often concerned about having a successful business, they understand very little about what an ROI is, or how to really assess what their specific ROI on any single campaign, or in their business in general.

They think it’s a concept that only applies to big spending ad campaign managers.

While the concept is pretty simple, I’ve certainly seen more a few very complicated explanations.

I’ll try to show you how simple, yet  powerful and essential, it is.

What’s Your ROI?

Okay, here’s how ROI works.

Step 1.

You pay $100 for a solo ad (or Facebook ad, or Twitter ad, or anything else).

Total investment: $100

(I told you this would be simple).

I don’t care how many clicks or upsells or optins or anything else… we’re only talking ROI, here.

Your ad results in 5 product sales at $25 each.

Total income: $125

So you put $100 on the table (your investment), and walked away with $125 (your gross revenue). You’ve got $25 in your pocket that you wouldn’t have if you had never run that solo ad.

Your ROI (return on investment) is that $25.

It’s Not That Simple

While this all seems simple, it can get complicated.

Isn’t that always the way? … sigh.

Here’s the first problem.

People run an ad campaign, but they don’t really track how much they end up spending on it.

This is especially true when the campaign is run on several platforms, and expenses are dripped rather than paid in one lump sum, up front.

So, if you have an ad on Twitter, and another on Facebook, for instance… you can better track your ROI if you consider them as two separate campaigns.

That’s not only for tracking purposes, it’s also in order to see which ad platform is better for your particular offer.

You may do great with a Twitter ad campaign, but when it is duplicated on Facebook, it flops.

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What’s Your Actual Revenue?

The other problem marketers often have is in deciding on the revenue portion of the campaign.

Let’s say you spent $100 on a solo ad.

The ads start running on May 1st and end on May 5th.

On May 6th you look at your Paypal account and see you’ve made $75 (your “revenue”).

So, is your ROI a negative $25 (investment of $100 vs. revenue of $75)?

Well, yes, as of May 6th.

But what if you make 2 more sales on the 10th, for an additional $50 in revenue?

Now, your ROI is a positive $25.

You may be wondering how you could have made sales on May 10 if the ad stopped running on May 5.

Most ad campaigns should be set up to

1. get people on your mailing list; and
2. sell something to them

This is what we call a 2-step sale.

Now, you can run a 1-step sales campaign wherein somebody sees your ad and either buys or disappears forever.

If you’re running a 1-step sales campaign, then you cannot make any sales after your ad campaign ends.

But…

(I keep telling your this is simple, but you can see how it can get complicated)…

But, I can hardly think of any times when you’d want to run a 1-step instead of a 2-step campaign.

Why?

Because it’s more important to build your list than to make sales from your campaign.

That’s because you get a “life-time value” from somebody on your mailing list.

If you never get that person onto your list, then he/she only has value if they buy from your sales page. And that value is maxed out with that one single sale.

You don’t want that.

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You want to be able to offer somebody your product or service in email follow ups for a long, long time to come (the so-called “lifetime” factor).

Back to our immediate issue.

What is your revenue from your $100 solo ad campaign?

Well, assuming it was set up as a 2-step sales campaign, then you’ve got people on your email list who did NOT buy, as well as those who did.

So, as you send out emails to your list in the days following your campaign, you should be offering them a chance to buy the product that they didn’t buy from your original ad.

Typically, you would want to offer this product a few times within the first 30 days that they’re on your list.

So, that means that you won’t know what your revenue is for 30 days!

Using the example above, you’ll have to wait until June 5 to total up all the revenue you made from that particular campaign.

Then, balance that against your $100 investment and you’ll see what your true ROI is for the campaign.

What’s Your ROI?

There’s one other complicating factor, here.

What’s your ROI when you run a free campaign?

People often think that ROI doesn’t factor into a free campaign because there’s no “investment.”

That’s not really true, though.

Even if you never spend a dime on a paid ad campaign, if you’re doing business online… you’re making an investment.

The closer you track and evaluate that investment, the greater the likelihood of running a successful business instead of a confused one.

If you spend 30 days promoting your new training course by writing blog posts about it, sharing links to your promotional post, or even to your landing pages on Twitter and in Facebook groups… that’s a campaign.

But it’s not a free campaign.

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You’re investing in that campaign.

You have to assign a monetary “value” to your time and effort in operating this campaign.

People rarely do this because it’s a vague concept.

You probably don’t know how much time you put into it, and even if you do… you don’t really know how to value your time.

That’s what I call a “confused” business rather than a sharply focused one.

I would challenge you, though, to treat your free promotional efforts as ad campaigns.

To do this you need to do 2 things.

1. Set a value on your time. Get some kind of understanding of what your time is worth to you. This varies widely with everyone, of course, but try to establish some standard of your time-value.

2. Track the time you invest. This may sound difficult, but it’s not if you run your campaign methodically.

So, if your entire campaign revolves around promoting your new product in Facebook groups, then set specific times of the day for engaging in these groups. That way, you’ll know exactly how much time you invested.

Multiply your hours by your time-value and that’s the amount of your investment.

I really like to have my clients do this because, even though it’s not a perfect science like when you run a paid campaign, I can pretty much guarantee you’ll find what virtually every one of my clients has discovered.

That’s this.

Your ROI will probably be much higher when you run paid campaigns, than when you run free ones.

The investment is usually much higher, and the revenue smaller.

This is why I believe paid ad campaigns will almost always more profitable than free ones.

The reason I tell people to do both, though, is because most people have more time than money. So after your budget for the month has been used, you’ll have time on your hands to continue to promote with free (time-investment) campaigns.

Running free campaigns also improves your brand and visibility so it definitely has non-tangible value.

You Must  Invest In Your Business

While the exact ROI of your promotional campaigns may not always be perfectly clear, one thing is.

You must invest both time and money into your business.

The more you invest, the greater your return should be.

Let me repeat that.

You must invest money.

and

You must invest your time.

Make sure you’re investing BOTH of them wisely.

If your returns are running in the red, then you need to slow things down long enough to learn better ways to run your campaigns.

That can mean buying courses to learn from, but I usually find that people make much better progress in much less time by hiring a good coach.

I have several levels of coaching, and would be happy to work with you.

I’ve just released my newest coaching program.

I’m really excited about it because it’s specifically designed to deliver high quality coaching to people on a very limited budget.

Click the image to get the details…

Elite Coaching Program

Now,  tell me this.

Do you run paid campaigns, free ones, both, or none at all?

What’s your strategy for building your business online, and oh yea… what’s your ROI?

-Donna

Donna Merrill
Donna is a well known blogger and creator of "Blogging Magic" - an intensive guide to blogging. "Blogging Magic" is for beginners who are trying to figure out how to bring their blogs to life with tons of visits, comments and social media interaction. It's even for advanced bloggers looking to reach new levels of authority and engagement with their audience.

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48 Responses to What’s Your ROI?

  1. Dana
    Twitter:
    October 19, 2015 at 1:34 pm #

    Hi Donna,

    You brought up an excellent point here – one that I haven’t (unfortunately) given a lot of thought to.

    That is the value of our time.
    It’s easy to think of investments in terms of dollars…but when it comes to our time, it seems as though we have plenty of it to give away without thinking of a return on that investment.

    At least it has (had) been the case for me.

    A perfect example of this, believe it or not, is in our relationships.
    How often do we feel as though we’ve given someone our time and attention – just to have this individual run with it and return for more every chance they get?

    Some people call them energy vampires. They can be friends, family members, etc.
    You give and give – and give all you have. But when that energy isn’t replenished, it becomes an internal deficit. We feel drained, resentful and have nothing left to give to anyone else, especially ourselves.

    But somehow, we forget this when it comes to a business and we invest our time – thinking it’s an easier investment to make than money because it’s “free”.

    I can see how this error in how we base our worth can show up in the results we experience in our lives. I’m in the process of learning these things now…but as the phrase states,

    “When the student is ready…”

    Thanks for the eye opening post.
    Dana recently posted..Are We Allowing Our Past to Create Our Lives?My Profile

    • Donna Merrill
      Twitter:
      October 20, 2015 at 12:01 pm #

      Hi Dana,

      Indeed, our time is money! From a casual friend or family member to a person we want to do business with, we do have to value our time. It is worth something.

      Funny you bring this up because family members may try to suck the energy out of me and I always tell them…hey, I get paid to do this so make it short! We have to consider the time it takes us to write a sales copy, or just about anything when we are online.

      Our time IS an investment. We have to calculate how much we are worth per hour for example and add that to whatever it is we are doing online.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  2. Brenda Pace
    Twitter:
    October 19, 2015 at 2:09 pm #

    Hi Donna,

    I totally get what you’re talking about here. At first, I got lost but I’m good now. I have to ask though have you run a Twitter campaign? And if so, was it successful?
    Brenda Pace recently posted..Time to Rebrand and Get Back to What’s RealMy Profile

    • Donna Merrill
      Twitter:
      October 20, 2015 at 12:08 pm #

      Hi Brenda,

      We’ve done some Twitter campaigns with clients and they are very similar to Facebook ads, but seem to cost a bit more. I think the real benefit of Twitter is in list building using Twitter Cards and other tools that are pretty cool.

      It doesn’t really matter, of course, if you use Twitter, Facebook, LinkedIn, YouTube etc. What matters, as I point out here, is your ROI. You want a good result and it doesn’t matter where it comes from. I think ALL of these and others are good ways to get a good ROI, but you need to be really focused on just one at a time and learn it thoroughly.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  3. Don Purdum
    Twitter:
    October 19, 2015 at 3:25 pm #

    Hi Donna,

    I think you may know where I’mg going to go but let me see if I can put a wrinkle in it, lol… 🙂

    Another question to consider is how much money is someone losing because the campaign didn’t have a message? I know you are of the 2015 Web B2B Usability Report that says around half of all visitors to an average website leave it immediately because of a lack of message.

    I won’t go into all that because if someone is interested they have easy to my site to learn how to get on message and build a brand.

    Here is the point… how negative is the real ROI when someone converts their time to dollars and factors that into the equation.

    I value myself at over $100 per hour. So, if it takes me five hours to put a campaign together, I spend $100 and I make $125 – I’m really in the hole big.

    Plus, factor in that the message is completely lost on the audience and it’s even worse than that.

    When measuring profit, with is really what ROI is, there is a lot to take into account as to whether your spending the right time, doing the right things, that equate to money spent being a real profit.

    Love this Donna! I think you and I could do this all day long, lol….

    I hope I added a little bit of value and thought to your post which is FANTASTIC!

    Have a great week my friend.

    ~ Don Purdum
    Don Purdum recently posted..Branding That Gets the Attention of an InfluencerMy Profile

    • Donna Merrill
      Twitter:
      October 20, 2015 at 12:31 pm #

      Hi Don,

      The message in your ads is always key, of course, and that’s a whole different topic. Probably a good idea for another post… so thanks for that 🙂

      As for the ROI of the ad in the example… you profit $25. Now, to say that it cost you $500 in time spent is really missing the deeper implications of an ad campaign.

      If you are arranging an ad campaign with landing pages going to an opt-in first, then a front end offer, and then deeper into a sales funnel… maybe that will cost you a ONE-TIME $500 set up fee (for the time it took you putting it together).

      To say that making ONLY $25 puts you in the hole is only true if (1) you have no back-end sales funnel (2) you fail to get people to sign up for your email list (3) you don’t optimize your email list (4) you fail to “scale” your ad campaign.

      I’ll talk about just #4 for a moment. If you could spend $100 and profit $25, would you be willing to scale that to a $200 ad spend to profit $50. How about (as you’ve developed a reliable tracking sheet to support your projected results) spending $1000 to profit $250, or $10,000 (over time, not necessarily one ad buy) to profit $2500. This is what we call scaling, and if you have an ad that makes a profit, the more you scale, the more you profit

      But that’s not even the real profit structure here.

      The deeper profits come from the list you build, your back-end offers and the long-term relationship you build with loyal subscribers, customers and repeat customers. That’s why, even if I broke even, I’d run with an ad campaign like that all day long. It’s called free traffic, free list building… if you’re at the break-even point.

      On the surface, you “lost” $500 in time before you even ran the ad.

      But deeper into the campaign, you’re building a tremendous business as you keep the campaign funded.

      This all presumes, of course, that you’re not simply losing a ton of money on your ad. That’s a different matter. We all run losing campaigns and the key is to either tweek them, or trash them. Run with the winners, drop the losers. If one our of 10 campaigns is a winner, that’s the one you scale up and build your business with. You simply cut your small losses with the others.

      Fun topic, right? Who said ROI had to be boring… lol

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  4. Sherman Smith October 19, 2015 at 3:42 pm #

    Hey Donna,

    I use to do paid advertising but I didn’t measure my ROI which wasn’t wise at all. With said said I was putting in more money than I was making money. My Credit card wasn’t looking too hot after a couple of months doing this.

    I never really thought about measuring the time I use to promote. Like its said time is money. You don’t want to waste time to lose money.

    I’ve seen these metrics on Google Analytics but I never took the time to understand them until recently. It’s very important to know these stats so you’ll know what direction you really want to go.

    Thanks Donna for this wake up call! Have a great week!
    Sherman Smith recently posted..My Top 6 Posts For The Month Of SeptemberMy Profile

    • Donna Merrill
      Twitter:
      October 20, 2015 at 12:38 pm #

      Hi Sherman,

      Yikes! Call me a penny pincher, but I do like to track just about everything when advertising.

      It is great to know that now you understand metrics. Never in my wildest dreams did I think I would love to do tracking stats, but here I am watching it with a bird’s eye view.

      It did take me a while to catch on how it all works but once I did, it became a passion. Tweaking ads, putting one up to another, using different colors, images, wording…I can write another post all about that lol.

      It is like watching a horse race.. seeing which ad will take the lead and then running with it. And yes, measuring time is important also because our time IS money.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  5. Ryan Biddulph
    Twitter:
    October 19, 2015 at 3:51 pm #

    Hi Donna,

    Goodness I shifted when I didn’t resist the investment point you make. When I invested my time and energy into my blogging business, doing effective, biz-building stuff, and when I invested a bit more on hosting I felt a big shift. Why? I proved to me that doing smart, biz-building stuff would build my biz. Case in point; I spent peanuts for crappy hosting and my site went down for months before I spent like 15 to 25 bucks a month – depending on the USD to Pound ratio – for my hosting service. Big time shift too, as my traffic increased as did my blogging revenue, because my blog was actually up and fast all of the time.

    As for ROI it helps to track one little change at a time. I do little metric stuff as I honor intuitive pulls, mainly, but if I want to track some metric, I make the tiniest changes to see where the impact came from. Awesome stuff Donna, thank you.

    Ryan
    Ryan Biddulph recently posted..Download 7 eBooks for $6.93My Profile

    • Donna Merrill
      Twitter:
      October 20, 2015 at 12:44 pm #

      Hi Ryan,

      Great example about your blog. I have seen huge changes you have made from the “old days” when I first met you. Indeed, you made a huge shift in your business. And once you started, it grew like wildfire.

      As for your hosting company, it is always wise to get the best one can afford. Putting all your energy into a blog and having crappy hosting will only loose time and time is money.

      I hear you when you mention intuitive pulls..they are important to recognize. But we also have to pay close attention to those metrics. Yes the tiniest change can create a huge impact. This is one thing that I find fascinating.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  6. Lea Bullen
    Twitter:
    October 19, 2015 at 6:18 pm #

    Hi Donna,

    I’ve heard of this and know that it’s a pretty good and standard question to ask when assessing your campaigns. But I’m not going to lie, before reading this I didn’t know how to figure out on my own. You’re right, it is simple.

    Determining your ROI on a free campaign makes perfect sense to me. I mean how else are you supposed to know if it’s worth all the work you put into it. You need to know that the time spent was well worth it.

    ~Lea
    Lea Bullen recently posted..Being Alone: 7 Benefits That Will Make It WorthwhileMy Profile

    • Donna Merrill
      Twitter:
      October 20, 2015 at 12:47 pm #

      Hi Lea,

      Yes, if we are doing a free campaign, we do have to evaluate our time. It all starts with how much you are worth per hour. Say it is $100, then how many hours you put into a certain campaign? When you factor it all in and write it down, you will be surprised.

      We do have to have a good return on our investment of our time. Once we have that mindset, we can work more easily and efficiently. I find that sticking to time management blossoms when we have this mindset.

      Have a great week ahead,

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  7. James McAllister
    Twitter:
    October 20, 2015 at 1:06 am #

    Hey Donna! It’s been a while hasn’t it?

    I have to say after spending a good chunk of the day reading motivational or theoretical posts it’s nice to see a nice technical, actionable piece here.

    I would say that the day I decided to quit pulling all of the money I could out of my business and instead reinvested a good chunk of that back in was a defining moment for me. Like many people running ad campaigns I did not start off with a positive ROI but through careful tweaking and testing I’ve got the return percentage increasingly higher, and as always I’m still looking to boost it further.

    It did take a long time and quite a bit of money to determine vital metrics like my cost of acquiring a subscriber, the value of that subscriber in both the long and short term, conversion rate for product sales etc. but it was so worth it. Of course these are changing all the time but it’s much easier now.

    As you’re well aware, once you’ve got a profitable system in place lots of good things start happening because paid traffic is practically infinitely scalable.

    You make a good point on measuring time, and this is an issue I continue to struggle with. This is my full time job and I do enjoy what I’m doing, but when taking on new challenges I do need to factor in the opportunity cost in case that time could be put to better use.

    Thanks Donna and good to talk to you again here!

    – James McAllister
    James McAllister recently posted..Interview With Kim Willis On Selling High Ticket ProductsMy Profile

    • Donna Merrill
      Twitter:
      October 20, 2015 at 12:53 pm #

      Hi James,

      It is so great to see you again. I have no doubt that you have a great understanding of ROI. Yes, when we first do it, it can get a bit confusing and sometimes we fall flat on our face. Silly mistakes can be costly. I know…I’ve done some lol.

      You said it all when you mentioned that with careful tweaking and testing, your return percentage was higher. And yes, we are always scaling it up aren’t we?

      It takes some time and money to get our metrics in place, but once we do we find that it is practically infinitely scalable. It is like a big puzzle and challenge and that’s what keeps me going.

      We do have to measure our time. I know what you mean when you say that it is a full time job for you and you enjoy it. So do I, but we have to put a price on our own heads and factor that in.

      Great to see you again,

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  8. Harleena Singh
    Twitter:
    October 20, 2015 at 8:51 am #

    Hi Donna,

    You’re absolutely right that ROI is the most important aspect of any business and that is applicable for bloggers as well. Thanks for explaining it in simple terms.

    Definitely, a 2-step campaign makes more sense. Recurring sales increase your ROI. Something that you invest now will keep giving you return over a period of time.

    Yes, there is nothing as a free campaign because time is precious and you have to factor that in as a form of investment. You wouldn’t like to let that go waste. I like your suggestions on how to treat your promotional efforts as paid campaigns.

    I agree that paid campaigns can be more profitable and one should go for both, paid and free types of campaigns. I personally haven’t yet tried the paid ones, but will do so when I’m ready with my product, whenever that happens. 🙂

    I believe there are many ways to build a successful online business – one of them is to first build a brand, which increases your chance of a highly profitable ROI.

    Thanks for your really helpful and informational post. Have a nice week ahead 🙂
    Harleena Singh recently posted..Guide To Healthy Living – The MEN ApproachMy Profile

    • Donna Merrill
      Twitter:
      October 21, 2015 at 11:51 am #

      Hi Harleena,

      As you know, I do like to take something and make it simple. When it comes to ROI, people can explain it to death and after a while I want to bang my head against the wall. But it is pretty simple when you look at it in a plain way.

      Paid, Free, or both. When free, we do have to put a price tag on the time we invest in it. But in the long run, that time can be scaled up. So weather free or paid, time or money, the initial cost is invaluable because of the way we can scale it.

      So true….we must firs have a brand which will increase our chances of a highly profitable ROI.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  9. Stella Chiu
    Twitter:
    October 20, 2015 at 11:58 am #

    Hi, Donna

    The term ROI scares many people off because it appeared as a complicated matter. You lay out in the such simple way that people, who are not interested in Math, can get hold of.

    In the previous posts, you mentioned the 2-step sales is better than 1 step sales. We did not fully grab what it meant. You explained so clearly the reason behind the 2-step sales better in long run (because of the collection of list). We really appreciate it.

    I totally agree that we need to use both the paid and free ad campaigns for the benefit of profit .

    As far as incorporate our free time and energy into the formula of ROI, I have different view point. It is good way to calculate the absolute ROI for the successful bloggers. However, it is not a good option for beginners because the ROI will be always in negative territories for a long time. Then there will be no motivation to continue.the adventures.

    Thanks for your excellence post!

    -Stella Chiu
    Stella Chiu recently posted..Forgiveness is the Ultimate Key for the Healing of CancerMy Profile

    • Donna Merrill
      Twitter:
      October 21, 2015 at 12:27 pm #

      Hi Stella,

      Yes, that two step process works so well and I’m glad you grabbed the meaning of it!

      Indeed, the term ROI used to scare me off too. It was always presented so complicated whenever I researched it. But I like to take it down to simple terms.

      As you point out, it’s important for newbies to understand that while their “time is money,” it’s an investment that is necessary just to become a professional.

      You can’t worry about your time investment in your online business until you really know what you’re doing. This is why I always tell newbies to work through their passion. If they’re not passionate about their niche, they can get easily discouraged by the work, learning and effort they must make just to position themselves properly within their niche.

      Now, some people moan and groan at that and tell me “I’ve gotta do all that before I can start making money?” I remind them that they’d probably think nothing of spending 4 years in college, come out with a $100,000 bill to pay and have not even looked for a job, yet. And when they do start looking, assuming all their financial woes are now behind them… well, that’s a story for another day 🙂

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  10. Adrienne
    Twitter:
    October 20, 2015 at 2:19 pm #

    Hey Donna,

    I don’t run any paid ads but I do value my time. That’s why I find it unnerving at times when someone will email me asking me to contribute something and want it by the end of the week. Like my time isn’t valuable and that’s all that I sit here and do all day.

    When you’re running a business and especially if you’re the sole proprietor then our time is valuable. We’re the only ones writing the copy, writing the ads, creating the sites or the products so when we get ready to promote it we definitely want a return on our investment even if it’s just been our time. That’s building a business for you.

    I know in the past when I used to run ads I wasted a lot of money, it was like throwing it away and that’s not money I needed to be wasting. The lessons you teach and the help you can provide are so very valuable. Like I always say, when you’re ready to head in a new direction hire a darn coach so you won’t waste more time and money trying to figure this out on your own.

    Thanks for making this so clear for us and sure hope you guys are having a great day.

    ~Adrienne
    Adrienne recently posted..Open Oceans of Opportunity By Being Vulnerable and HonestMy Profile

    • Donna Merrill
      Twitter:
      October 23, 2015 at 11:58 am #

      Hi Adrienne,

      I just have to laugh because that happens to me too. Some expect us to come up with something in such a short time, it’s crazy. I wonder if they ever consider we do have scheduled appointments? Would they do that to their hairdresser? Dentist? Just have to laugh!

      The only time I use paid ads is when I know who to target and why I’m doing it. Usually to build a list and then get said people into my funnel. In the past I’ve lost money paying for ads, but now I know much better how to do it. Yes…Hire a Coach!!!

      Our time is precious to us and we always have to factor that in. We have to know our worth. It is something I had to learn a long time ago, but a lesson well learned.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  11. lisa thomson
    Twitter:
    October 20, 2015 at 2:33 pm #

    OMGosh, Donna. This is a brilliant breakdown in understanding ROI. I mainly use free/ time investment to promote my product. I use paid campaigns sparingly. I’m not sure what my ROI is and obviously, I wish it was more. If it were high, I’m sure I would have that number in my brain. I’m glad you mention that the time investment is intangible b/c I find that to be so true. Exposure and community on the web certainly add credibility to us as a business person. Thanks Donna! Loved this post.
    lisa thomson recently posted..The Wine Diaries-Editing For ApprovalMy Profile

    • Donna Merrill
      Twitter:
      October 23, 2015 at 12:58 pm #

      Hi Lisa,

      So glad you loved this post. When we read about ROI it can be so confusing. But when you look at it simply, it is investing our time and money. All of which needs to be accounted for. Then we can get a good idea of that return on investment. And Yes, Time needs to be calculated in this equation.

      I’m sure if you calculated it, you would have a number in your brain. lol.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  12. Marquita Herald
    Twitter:
    October 20, 2015 at 3:58 pm #

    You know it’s funny Donna – the term ROI has been so much a part of my adult life that I actually used to joke about having it tattooed on my wrist! But in all fairness when you’re in charge of sales and marketing with a half million+ dollar budget the emphasis on accountability is perfectly understandable. Your advice is spot on and even though my budget is SO much smaller these days the one area I have always struggled with is putting a price tag on my time. That may be changing however since I’ve been tagged to serve as a consultant on a major project and had to come up with my fee. They didn’t laugh at me when I quoted it so who knows, maybe this will end up being a new stream of revenue! Thanks for the great advice and inspiration.
    Marquita Herald recently posted..Why We Struggle to Embrace ForgivenessMy Profile

    • Donna Merrill
      Twitter:
      October 23, 2015 at 1:10 pm #

      Hi Marquita,

      When you were in charge of sales and marketing with a half million+ $ budget that ROI must have felt like a tattoo lol.

      But now, working on your own, it can be a struggle putting a price on your time. It all depends on what you are working on.

      It is great to know that you came up with a fee that may end up becoming a new stream of revenue for you. Good luck with that!

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  13. Sue Bride
    Twitter:
    October 20, 2015 at 8:22 pm #

    You’ve explained ROI really well, Donna, thank you.

    Another useful figure to work out is your Average Revenue Per Lead This will tell you how well you are converting your leads to buyers and whether you need to tweak your ad or make changes who you are targeting. Then there’s Average Revenue Per Acquisition – how much you are making for each person who buys.

    That might sound impressive but it’s just theoretical for me. I’m just learning about this and have yet to put it into practice. Maybe it will become clearer once I do. I hope.

    I don’t take my time into account apart from by ditching things that haven’t worked. It’s not that I’d be going out to get a job instead.
    Sue Bride recently posted..Do It Later Note-Taking SystemsMy Profile

    • Donna Merrill
      Twitter:
      October 23, 2015 at 1:16 pm #

      Hi Sue.

      Your Average Revenue Per Lead will become so clear when you put it into practice. As I’m writing this, it is exactly what I’m doing all week long lol.

      After a few times working on that, you will be able to calculate that number. I never thought I could be this good at math, but when it comes to this, I can shoot the numbers off the hip lol.

      No you cannot look back and take time into account on things you ditched, that will drive you to a job he he he. It is a good less though.

      Once you put everything into practice it does become so clear.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  14. Mark
    Twitter:
    October 21, 2015 at 1:27 pm #

    What an absolutely fabulous post Donna!(As usual!LOL!)

    And the best part is, going forward, any serious marketer, on or offline,
    would be extremely wise to follow, as best they can, especially in the beginning,
    exactly what you’re taking the time to lay out for free here in a tremendously helpful
    blog post!

    Because the real insider magic you’re sharing here, could very easily be a free cheat
    sheet type of lead magnet giveaway!

    Valued at X and worth every penny!LOL!

    Or it could easily be a free 90 minute Google
    Hangout webinar that converts into some sort of paid one on one coaching sessions.

    In where you or another extremely qualified expert walks them through “how to” do exactly
    what you’re sharing, using some of their actual free or paid advertising/marketing campaigns as real life templates!

    Just another fabulous post Coach! Jammed pack with some real world know how!

    Thanks a bunch! I’ll definitely be sharing this one!
    Mark recently posted..How Extremely Savvy Entrepreneurs Turn A Little Known Marketing Tactic Into Really Big Money!My Profile

    • Donna Merrill
      Twitter:
      October 23, 2015 at 1:29 pm #

      Hi Mark,

      Thank you for your kind words! Yes it is pretty easy when we break it down to a simple format. ROI can get confusing for many people. This is why I just had to write this.

      I just came from your latest blog post and the video you have in there does go perfectly here on this post.

      Put up a free and/or paid ad; give something free in exchange of someone’s email. (better make it a good one lol) Then offer an OTO, from there keep on going. Engaging the list, giving more information there than anywhere, and have a good sales funnel in place.

      Before you know it, you do have an ongoing “machine” in place.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  15. Ikechi
    Twitter:
    October 22, 2015 at 2:54 pm #

    Hi Donna

    I am a newbie when it comes to ROI but it great to get to know the concept better. I am aware of ROI when it comes to Paid campaigns but ROI when it comes to free campaigns is new for me.

    You are so right that our time and effort can be measured in monetary value. Thanks for sharing this concept and hats off to you for this post.

    Thanks for sharing.

    Ikechi

    • Donna Merrill
      Twitter:
      October 24, 2015 at 12:05 pm #

      Hi Ikechi,

      It can be pretty simple when you break it down. If it is a free campaign, just put a price on your time, i.e. hourly. Then go with it. It is not an immediate result, but rather trickles down a good sales funnel to measure.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  16. Corina Ramos
    Twitter:
    October 22, 2015 at 3:40 pm #

    This is a great explanantion Donna. Thanks so much for breaking it down for us like this. I never stoppe to think about my ROI. I’ve only done one paid campaign on Twitter. It got me the clicks but nothing else happened.

    That kind of left a bitter taste so I haven’t made an effort to do another but your advice here will definitely get me going on a new campaign. I need to sit down and think of better ways to run it and have a better plan in place before launching.

    Now when it comes to my time, I definitely value that but I could be better in the way I invest my time. Ah, always a work in progress :).

    Thanks for writing such a great post Donna. I hope you’re having a great week!

    Cori
    Corina Ramos recently posted..17 Money Making Websites You Can Use For Affiliate MarketingMy Profile

    • Donna Merrill
      Twitter:
      October 24, 2015 at 12:34 pm #

      Hi Cori,

      Sometimes you just cannot go on just one campaign. There could be many things that needed to be tweaked. It all depends. But don’t ever let it get you down. It is like writing a blog post and no one comments, so you just never do another again.

      When doing any type of campaign, free or paid, we need to think through the entire process. I like to work backwards. Have an end goal (product/service) and work baby steps with different price lines on that specific topic. Then roll out the campaign free or for very little cost.

      Just say’n lol.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  17. Chery Schmidt
    Twitter:
    October 23, 2015 at 3:45 pm #

    Hello Donna, You have done an Awesome job with this post my friend. Oh Yeh Your ROI is the most important aspect of your business, without it you wouldn’t have one Right?

    I have used paid advertising in the past and I must say my ROI were never that good, since that time I do put more of my efforts on other things but as you have stated Time Is Money too.

    I guess we just need to find a way to measure this as well HUH?

    Great Share Thanks and do have a Great Weekend Ahead..
    Chery :))
    Chery Schmidt recently posted..Get Ready For Big Things To Happen In Your Life!My Profile

    • Donna Merrill
      Twitter:
      October 24, 2015 at 1:15 pm #

      Hi Chery,

      Sometimes when using paid advertising, one must consider the opt in ratio. If there are those that opt in and give you their email, you can work your list to your sales funnel.. When done properly, that can convert over time. Something to think about

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  18. Ravi Chahar
    Twitter:
    October 24, 2015 at 2:35 am #

    Hi Donna,

    This is a kind of new thing to me.

    I was not aware of ROI. I am sure it will help me a lot. I like the examples you have taken in this post. Most of the bloggers just go for ads, but they don’t check ROI.

    Taking ads is the money making process, but what if people don’t have proper knowledge about ROI.

    They must know more about it. I am sure this post is going to help many people.
    Thanks for the post.

    Have a nice weekend.:)
    ~Ravi
    Ravi Chahar recently posted..How To Add New Users In WordPress For Better Site Handling?My Profile

    • Donna Merrill
      Twitter:
      October 25, 2015 at 11:56 am #

      Hi Ravi,

      Many people do get confused when it comes to this. Some think that putting an ad up will gain instant cash. Rather, the ROI is a process. As long as you have a good opt in ratio to something, and have a sales funnel set up, then via emails it can work.

      The email part is important because this is where we engage with others to get the KLT factor. That makes it easier for a person to eventually purchase from you.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  19. Atish Ranjan October 24, 2015 at 4:09 am #

    Hello Donna,

    What a write-up?

    Awesome!

    ROI is the thing that everyone needs to calculate when a campaign or project gets completed because only this can tell you whether you have made the profit or not. If not then you can make better plans to increase the ROI.

    Loved the way you have compiled the post. Thank you donna.
    Atish Ranjan recently posted..Best Headphones you can buy for your iPhone 6S or 6S PlusMy Profile

    • Donna Merrill
      Twitter:
      October 25, 2015 at 12:02 pm #

      Hi Atish,

      Nice to kow you liked this post Atish. ROI is the best way we can calculate when a campaign gets completed….but sometimes it tricks me.

      I’ve had people opt in to a campaign a year ago, and then to my surprise purchase something a year later. Go figure? But it does gives us a good way of seeing what works and what doesn’t.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  20. Robin Strohmaier
    Twitter:
    October 24, 2015 at 4:44 pm #

    Hi Donna,

    This is one of the best explanations of ROI that I’ve read. I appreciate you taking the time to explain it so thoroughly

    I run both paid and free campaigns. My experience has been that it can be difficult to calculate ROI on some. For example, one post late last winter was about Google’s mobile friendly ranking algorithm..This post was marketed with paid ads, email marketing, etc. As a web designer, I am honored that this single post has brought more ROI than I’ve had in years and still is.

    Thank you for taking the time to explain ROI so clearly. I will be sharing this again!

    ~ Robin

    Thank you for
    Robin Strohmaier recently posted..9 SEO Nightmares – Real Scary Disasters to AvoidMy Profile

    • Donna Merrill
      Twitter:
      October 25, 2015 at 12:35 pm #

      Thank you Robin,

      I do try to make things simple so people can understand. Sometimes ROI cannot be measured to an exact number. Like you mentioned in your example, it can go on and on for a long time. But we can just chalk that up to a winner!

      I had that happen also. When I receive payment for something I long forgotten. Just goes to show that we hit on something good.

      But another way ROI can be a bit confusing is that it does take time and may not be an immediate venture. When we take into consideration our follow up emails and couple that with a sales funnel, the ROI can keep on living.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  21. Joy Healey
    Twitter:
    October 25, 2015 at 2:32 pm #

    Hi Donna,

    That’s a great post on ROI, it always amuses me that people think they can market a business for “free” – if only!

    I’m pretty good at valuing my time, because my biggest earner is my offline business – but that can be a limiting factor to my online business, because it can be hard to devote time online, when offline is more profitable.

    But there’s the rub – the goal is for the online to overtake the offline!

    So far I’ve put a lot of time into my online business, but haven’t invested well in paid advertising – partly because I’ve still been getting my “tools of the online trade” in order.

    It will soon be time to move over to paid ads and I’ll be sure to watch very carefully the points you made. I’ve already had bad experiences with paid online adverts, so definitely not keen to repeat those mistakes,

    Thanks for explaining ROI so clearly.

    Joy
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    • Donna Merrill
      Twitter:
      October 25, 2015 at 2:50 pm #

      Hi Joy,

      I can see where time is an issue for you. Offline doing well but moving onto online does take time, but time well spent. I’m sure as you are accumulating your “tools of the online trade” and putting them into action, things will switch.

      When running free or paid ads, we always have to factor in so much from our time, to money paid. But it is not a one time thing. As we roll out, someone opts in, and may not purchase immediately. But somewhere down the line with good emails and a great funnel, they can purchase an up sell or down sell. Then the ROI starts shifting lol.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  22. Lillian De Jesus
    Twitter:
    October 25, 2015 at 5:23 pm #

    Hi Donna,

    WOW! You’ve opened my eyes on ROI. I really never thought about the ROI on the “FREE” promotions or marketing such as Facebook groups and other areas on SM. You’ve got me thinking!

    I definitely think that paid promotions can do best on ROI.

    Thanks!
    Lillian
    Lillian De Jesus recently posted..7 Ways to Repurpose Your Content Visually to Delight Your CustomersMy Profile

    • Donna Merrill
      Twitter:
      October 25, 2015 at 8:18 pm #

      Hi Lillian,

      Indeed, “Free” promotions have have our time considered in order to measure the ROI. I like both paid and free versions of doing this. But always keep in my mindset that my time is worth money.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  23. Kathryn Maclean
    Twitter:
    October 25, 2015 at 7:42 pm #

    Wonderful article on ROI Donna,
    I do value my time, because my biggest earner is my offline business. I know exactly what I make an hour with this – so devoting time to my online business, I am aware that time is money.

    A 2-step campaign makes more sense. Recurring sales increase your ROI. Something that you invest in now will keep giving you return over a period of time. I have used paid ads when I had a certain target, usually to build a list to get people into my funnel. In the past I’ve lost money paying for ads, but now I know how to do it.

    ROI can be confusing in that it takes time and you may not see an immediate return. Take into consideration the follow up emails with a sales funnel, the ROI can keep giving a return for quite a long time.Tweaking and testing is all part of it as well.

    Hiring a coach is smart, I learned it the hard way over many years on my own. Don’t do that.
    Kathryn Maclean recently posted..Up on InstagramMy Profile

    • Donna Merrill
      Twitter:
      October 25, 2015 at 8:21 pm #

      Hi Kathryn,

      You sure have a great handle on ROI. I do feel the same way that what you invest now can give you a great return over a period of time.

      Once we have that sales funnel in place money does come over time. Indeed ROI can be a confusing subject for so many people. But when we do as you mentioned above, it becomes simple for us to do.

      The first time we take a try at it, it may bomb out, but with practice and especially hiring a coach, we can have so much financial gain.

      -Donna
      Donna Merrill recently posted..Your Blog Is Your Business CardMy Profile

  24. Monna Ellithorpe
    Twitter:
    November 1, 2015 at 2:05 pm #

    Hi Donna,

    Thank you for the lesson on ROI. I haven’t paid for advertising in so long and I had no idea what I was doing and lost a lot of money in a very short time.

    I do have a problem with setting a value on my time. I still have so much to learn.
    Monna Ellithorpe recently posted..The Guru Who Ignored MeMy Profile

  25. Andrew
    Twitter:
    November 2, 2015 at 2:12 pm #

    Hey Donna

    Really great post here.

    Though I’m not fully knowledgeable on this topic, I’m glad you raised it and wrote about it too. As a person that understands that blogging is more businesslike, knowing your numbers and especially your roi is important. I tried Facebook ads a few months back but I was just playing around with it. Clearly I need to know more about business and numbers in order to succeed and eventually turn a profit.

    Thanks for this wake up call, Donna.

    – Andrew
    Andrew recently posted..5 Simple Surefire Ways To Increase Your Blog SubscribersMy Profile

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