RETURN ON INVESTMENT

During the planning phase of the R³ Process™, we attempt to establish metrics to measure ROI for each of the communication tactics we pursue.

The traditional formula for calculating ROI from marketing initiatives is simple: Measure new profit from a marketing campaign, subtract the campaign cost, then divide the remainder (net profit) by campaign cost to get the ROI percentage. For example:

$125,000 (25 new clients X $5,000 average revenue each)
- $100,000 (marketing campaign cost)
= $25,000 (net profit)
÷ $100,000 (campaign cost)
= 25% ROI

So, in this instance, it's easy to see the importance of calculating the average value of a new client, as well asking each of them,"How did you hear about us?", and then tracking their responses. (In practice, determining ROI can get more complicated for a variety of reasons, and we're happy to help clients sort things out.)

The point: because our formula focuses on strategically enhancing three critical elements—Relationships, Reputation, and Results—we're able to multiply the typical ROI of PR and marketing campaigns.