[question] Measuring ROI - Do you use costs saved or revenue generated?


(Richard Millington) #1

Need to get some opinions on measuring the ROI.

Let’s imagine you’re trying to calculate the ROI of a community designed to generate leads via increased lead identification (watching videos / sharing problems), lead capture (completing an opt-in form), lead contact (contacting an email address for more information) or lead volume (web traffic).

I can see two ways of determing the ROI of this.

  1. You could use the equivalent lead generation cost. i.e. cost of advertising to get a similar number of leads.

  2. You could use the profit of each lead. i.e. how much profit does each lead generate.

The former method assumes you would have acquired that lead anyway but the community was the cheapest way to do it. The latter assumes you wouldn’t have acquired that lead anyway and thus it’s all additional profit.

Does anyone have any thoughts, opinions, or experiences here?

This comes up frequent in ROI calculations so I’m keen to figure out what people use (if people use any of this).