What is an Attainable ROI?

What is an attainable ROI?

There are very few metrics that command more attention in the digital world than a bolstered ROI (return on investment). A positive return will always be important, but what is good or bad varies based on industry. This will always be dicated by standards, budget, and overall objectives. We do feel strongly about what an excellent ROI is, and for the benchmark should be about 500% or 5x the initial investment. This is how to showcase performance on it’s highest level.

To begin with an example, if your marketing campaign costs you $1,000 and ultimately generated $6,000 in revenue, your profit is $5,000. When you divide your $5,000 profit by the $1,000 cost and multiply by 100, the result is 500%. This tells you that for every dollar spent, you got five dollars back in revenue, which is a strong indicator that your marketing initiatives are on the right track.

But why is 500% the most effective ROI? In some places even achieving 300% (or 3x) is considered a success. Most brands aim for results that comfortably exceed the breakeven point, ensuring that every dollar invested produces a return that justifies its operation. Going 5x on your ROI means you have not just comfortable passed your threshold, but also have been able to convert efficiency in an exceptional manner. Hitting such a plateua speaks highly of how you are targeting the right audience, introducing a compelling message, and submitting a clear and concise creatibe strategy.

But reaching this level is easier said than done, right? Actually, if a team focuses, this level of success is not unheard of. You will absolutely need a combination of smart planning and ongoing refinement. From the beginning, you should have a clear sense of which key performance indicators matter most to your business. This can be sales, leads, conversions, or website traffic. When these indicators are aligned with your overall objectives, it’s easier to track your marketing activities and tie them directly to what you have designated as revenue. Like everything else, sometimes testing is incredibly important, giving you different variations of ads, offers, or even channels that will establish approach and suitable tactics.

You should also invest in certain metrics such as a tracking and analytics. It is crucual to understand how conversions happen and what is your landscape. Consumers usually go through multiple touchpoints before making a decision (or purchase). Utilizing platforms that give you insights can help when it comes to allocating budget which will essentially yield a higher return.

The reason why 300% is still a viable number is because of realistic expectations. Not every campaign will yield a 500% ROI and with the landscape competitive as it is, there will be a ton of room to grow. Focus on the milestone and achieve the higher ROI easily. Nothing comes easy, especially in the beginning of your growth. The ultimate goal should always be consistency and effectiveness. Monitoring where you are will always be beneficial in finding our where you need to be.