Know-How Exchange : Strategy

Doubtful.

Trying to calculate "a comprehensive marketing ROI based on all potential marketing dollars and categories" is going to cost more and take more time/effort than it's worth -- if it's even possible.

You can get 90% of the benefit with 10% of the effort if you're willing to accept that the measurement tools are not fine enough to measure every nuance of a marketing plan. It's like trying to find the thickness of a sheet of paper with a yardstick.

You're better off taking 500 sheets of paper and measuring the thickness of the ream, then dividing it by 500. (i.e., Take your total marketing effort and see if it generates the desired sales/profit/awareness.)

If there are a few large components of the plan, you may be able to do some selective testing to find out the relative ROI for them, but much more than that will almost certainly be a waste of time, money and effort.

As Michael states, calculating marketing ROI for every activity is very difficult. The biggest source of difficulty is in tying leads to marketing activities, conversion of leads, and then revenue from the conversion of leads. The easiest part, but yet still not easy, is tracking dollars per marketing activity. The marketing ROI is then the ration of sales revenue per marketing activity to marketing expenditure on that activity. The VERY easiest thing is to set of a spreadsheet for calculating!

• Column A: list marketing activities


• Columns B - M: List dollars realized from each activity


• Column N: Sum of revenue from each activity


• Column O: Cost of activity


• Column P: Marketing ROI (N/O)

At the end of the activities, you can put TOTAL and sum columns N and O. Dividing these two sums (N/O) gives total marketing ROI.

Here's an article about setting up tracking for marketing ROI. The tracking is the hardest part!

https://www.newincite.com/articles_roi.html

Good luck and I hope this helps.

Wayde

Is your question about ROI for the marketing department as a whole, or ROI of specific activities?

If you are wishing to predict or calculate ROI of specific activities, I doubt seriously that such a detailed analysis is possible. Suppose a person sees your advertisement, stops by your trade show booth, then passes your literature to someone else in your company, who responds to a direct mail piece, keeps the info in his drawer for 2 months, then responds to a phone call? After receiving the info, before purchasing, the prospect visits your web site, then goes to an online news group to assess the market's perception of the product. How could you possibly know the whole chain of events? Even if you were to know the whole chain of events, how would you allocate revenue to each marketing activity?