Trade Marketing Efficiency
Posted: Sun Jan 12, 2025 4:16 am
Evaluation of trade marketing effectiveness can be represented by various metrics.
ROI
One such metric is ROI, an indicator that reflects the ratio of profit to invested funds.
The formula for calculating ROI is as follows:
ROI = (Return on Investment – Investment Amount) / Investment Amount × 100%.
For example, if 200,000 rubles mexico phone data were spent on advertising, and the profit was 250,000 rubles, then the ROI will be equal to:
ROI = (250,000 - 200,000) / 200,000 × 100% = 25%.
A high ROI level (more than 20%) indicates the success of investments, a low level (less than 10%) indicates the need to adjust the strategy.
LTV
Another metric that determines the potential profitability of a customer over the long term is LTV (long-term customer value). It reflects the total amount of revenue that a customer brings to a company over the period of interaction.
Formula for calculating LTV:
LTV = Average check × Number of repeat purchases × Average customer lifetime.
Let's assume that the average check is $100, the number of repeat purchases is 20, and the average term of cooperation is 3 years. Thus, the LTV calculation will be equal to:
100 x 20 x 3 = $6,000.
The LTV value helps you estimate the potential profit from your customers and plan your marketing budget accordingly.
ROMI
This metric, in turn, is an indicator of the effectiveness of marketing investments, displaying the ratio of income to each ruble invested in the company's marketing.
Calculation formula:
ROMI = (Return on Marketing Investment / Similar Expense) x 100%.
For example, if a company spent 200,000 rubles on marketing and earned 600,000 rubles on it, then the ROMI will be:
ROMI = (600,000 / 200,000) × 100% = 300%.
This means that the ruble invested in marketing brought a threefold return. ROMI of 80% and above is considered a quality result.
ROI
One such metric is ROI, an indicator that reflects the ratio of profit to invested funds.
The formula for calculating ROI is as follows:
ROI = (Return on Investment – Investment Amount) / Investment Amount × 100%.
For example, if 200,000 rubles mexico phone data were spent on advertising, and the profit was 250,000 rubles, then the ROI will be equal to:
ROI = (250,000 - 200,000) / 200,000 × 100% = 25%.
A high ROI level (more than 20%) indicates the success of investments, a low level (less than 10%) indicates the need to adjust the strategy.
LTV
Another metric that determines the potential profitability of a customer over the long term is LTV (long-term customer value). It reflects the total amount of revenue that a customer brings to a company over the period of interaction.
Formula for calculating LTV:
LTV = Average check × Number of repeat purchases × Average customer lifetime.
Let's assume that the average check is $100, the number of repeat purchases is 20, and the average term of cooperation is 3 years. Thus, the LTV calculation will be equal to:
100 x 20 x 3 = $6,000.
The LTV value helps you estimate the potential profit from your customers and plan your marketing budget accordingly.
ROMI
This metric, in turn, is an indicator of the effectiveness of marketing investments, displaying the ratio of income to each ruble invested in the company's marketing.
Calculation formula:
ROMI = (Return on Marketing Investment / Similar Expense) x 100%.
For example, if a company spent 200,000 rubles on marketing and earned 600,000 rubles on it, then the ROMI will be:
ROMI = (600,000 / 200,000) × 100% = 300%.
This means that the ruble invested in marketing brought a threefold return. ROMI of 80% and above is considered a quality result.