Trade Marketing Efficiency
Posted: Tue Jan 28, 2025 10:31 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 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 pakistan email list 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 order value × 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.
Read also!
"32 Methods of Finding and Attracting Clients"
Read more
Examples of Trade Marketing
Studying successful cases in the field of trade marketing allows you to delve deeper into the essence of this area.
Example 1
Organization Y is engaged in the production of wall clocks. To strengthen relationships with partners and stores, the sales specialist developed several effective strategies. During the summer sales, wholesale customers were given additional bonuses.
In addition, the Y organization launched a joint promotion with a popular online store. Buyers who ordered watches from this brand were given practical watch cases as a gift. The promotion of Y products encouraged partners to make active deals, and stores to increase sales.
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 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 pakistan email list 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 order value × 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.
Read also!
"32 Methods of Finding and Attracting Clients"
Read more
Examples of Trade Marketing
Studying successful cases in the field of trade marketing allows you to delve deeper into the essence of this area.
Example 1
Organization Y is engaged in the production of wall clocks. To strengthen relationships with partners and stores, the sales specialist developed several effective strategies. During the summer sales, wholesale customers were given additional bonuses.
In addition, the Y organization launched a joint promotion with a popular online store. Buyers who ordered watches from this brand were given practical watch cases as a gift. The promotion of Y products encouraged partners to make active deals, and stores to increase sales.