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What is the most important metrics for ROI

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# 1
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Accepted by topic author Rohan M
September 2015

Re: What is the most important metrics for ROI

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# 6
Top Contributor
Before you can determine the best way to measure your ROI you must decide what it is your website is hoping visitors will do - and what makes good business sense for you.

With eCommerce this decision is fairly simple - you want visitors to buy your products. So you need to be able to feed back the transaction values to the reporting. but remember, in most cases these numbers are for the total sales value - and this is not the profit from the sale.

In your case, for example, you mention the client looking for a 1:2 return. So the client would like to spend $100 for every $200 sold. But if the cost of the products is $100 then there is no return... you've spent $100 to make $100 (by selling $200).

I appreciate that this is very simplistic - and I apologize in advance to anyone who feels it might be condescending - it's not meant to be - it's just that I've had clients who are delighted when they see a 200% ROI only to realize later that they have, in fact, lost money and need to be on 300% to break even....

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Re: What is the most important metrics for ROI

Top Contributor
# 2
Top Contributor
My focus tends to be on the cost per conversion - but this depends upon the conversion being meaningful in terms of the business model - in online sales this is quite simple - in lead generation then it needs a little more attention in terms of figuring out the average value of a lead....

Where some people have, for example, conversions which are based on the number of pages viewed or the time spent on the site, this becomes less useful since this is often not a reflection of the value of the visits.

Re: What is the most important metrics for ROI

Visitor ✭ ✭ ✭
# 3
Visitor ✭ ✭ ✭
Hi Steve,

Thanks for your answer.
In my case its an ecommerce which wants to have a revenue of 1:2.
So other than cost per conversion what could be more inputs to show results.

Re: What is the most important metrics for ROI

Top Contributor
# 4
Top Contributor

Hi Rohan,

 

ROI in itself is an important metric to watch for Smiley Happy

 

In addition to what Steve said above, I would just like to add that ROI can have different meaning for different business models. It actually depends upon whether you are looking to generate sales, leads, phone calls or simple branding.

 

Help center has a very informative article on ROI and I would definitely encourage you to read this: https://support.google.com/adwords/answer/2404261

 

Pankaj

Re: What is the most important metrics for ROI

Collaborator ✭ ✭ ✭
# 5
Collaborator ✭ ✭ ✭

Hi Rohan,

 

I would encourage you also to learn from some of these examples : 

 

Selecting metrics to maximize profit

 

How to estimate conversion value

 

Achieving profitability

Marked as Best Answer.
Solution
Accepted by topic author Rohan M
September 2015

Re: What is the most important metrics for ROI

Top Contributor
# 6
Top Contributor
Before you can determine the best way to measure your ROI you must decide what it is your website is hoping visitors will do - and what makes good business sense for you.

With eCommerce this decision is fairly simple - you want visitors to buy your products. So you need to be able to feed back the transaction values to the reporting. but remember, in most cases these numbers are for the total sales value - and this is not the profit from the sale.

In your case, for example, you mention the client looking for a 1:2 return. So the client would like to spend $100 for every $200 sold. But if the cost of the products is $100 then there is no return... you've spent $100 to make $100 (by selling $200).

I appreciate that this is very simplistic - and I apologize in advance to anyone who feels it might be condescending - it's not meant to be - it's just that I've had clients who are delighted when they see a 200% ROI only to realize later that they have, in fact, lost money and need to be on 300% to break even....

Re: What is the most important metrics for ROI

Visitor ✭ ✭ ✭
# 7
Visitor ✭ ✭ ✭
Thanks for your answer Smiley Happy

Re: What is the most important metrics for ROI

Visitor ✭ ✭ ✭
# 8
Visitor ✭ ✭ ✭
Thanks for sharing these. will go through them !

Re: What is the most important metrics for ROI

Visitor ✭ ✭ ✭
# 9
Visitor ✭ ✭ ✭
Thanks Steve,

Rightly said! totally agree.