Why ROI Measurement Is So Elusive

by MarthaBush on May 27, 2010

Martha Bush

Martha Bush

Definitions for Marketing ROI abound, but the pressures to achieve it have increased to fever pitch across all channels and marketing specialties. Why? One reason may be that with all the new marketing technology tools―with their claims of incredible measurement capabilities blasted to your in-box daily―the real complexity of getting to ROI has become washed over. Expectations have been raised. You need to figure it out.

But, pulling together the components of ROI makes sense in theory, but is somewhat difficult to track in practice:

  • Increased Response Rates:  These are usually very measurable
  • Increased Average Order:  This is measurable if your database can bring together complete transactions at the customer level
  • Reduction in Cost:  Now this is getting more difficult, depending upon how sales and marketing expenses are captured
  • Increased Lifetime Value of the Customer:  Often very complex to compute, requiring consolidated customer data across time and channels

Return on Investment on your marketing can be determined in several ways. But, unless you have a very robust campaign management system, after the marketing campaign, all your costs and revenue data must come together to be analyzed. Sounds rather simple, until you realize that most marketing operations make do with databases that were not designed for marketing and which have no easy way to track the cost side of the equation. Even on the sales side, there are usually issues. Marketing systems can track the sales of a targeted product, but not the ancillary products that were also sold as a result of the same campaign.

We find that a solid ROI analysis first requires designing the campaign in such a way that the critical data can be captured as it progresses. After these efforts we must bring data together from multiple sources (online, offline) and conduct an in-depth look at what happened.  IF all the stars align, we can get the metric we were aiming for… tracking the ROI of the program.

About the Author:

Martha Bush is SVP of Strategy & Solutions at SIGMA Marketing Group.  Follow Martha on or connect with her on .

{ 1 comment… read it below or add one }

Terametric July 28, 2010 at 6:40 pm

We agree with your concern in regard to the difficulty in calculating an accurate comprehensive ROI. The need for this ever “elusive” ROI is becoming increasingly prevalent. Here at Terametric we have focused our attention on finding a comprehensive measurement of all marketing channels. We suggest you look to our website (www.terametric.com) and read our blog (www.terametric.com/blog) to better understand how we plan to solve this problem!

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