ROI, or Return on Investment, is a buzzword that has been hanging around business conference rooms forever, like a bellhop waiting in a hotel room for a tip. It's one of those all-purpose phrases used to build customer goodwill: "We focus on ROI, and make sure you get the full return on your investment and more," you say, while hoping your potential customer is duly impressed by your business acumen.
But you need to be very aware of pitfalls. ROI is by no means an exact science. Businesses can have a very difficult, if not impossible, road ahead if they insist on quantifying every result of every marketing campaign. Of course, your business has always been able to determine whether programs and campaigns are working well, so-so, or not at all. Marketers can track and tie in bottom-line growth with improved marketing tactics. But when it comes to parsing the exact causation of growth, the equation grows extremely complex - so complex that the entire conference room may be asleep before you're halfway through the presentation.
ROI is also much more effective for some businesses than for others. Some businesses and processes, especially those involving relationship marketing, do not lend easily to simple measurement tools. There are too many human factors involved.
