ROI Dilemma – The Cartoon Version
True story. More or less.
Of course it’s usually not quite that simple either. You probably have to consider a few other things like overhead, the cost of customer service, and the cost of putting together and managing each campaign (you might be able to assume those are constants, but you might not). The average lifetime value of the customer could be a factor, and you might want to do a little bit of ROI predicting as well: how do things look two months from now if everything stays the same versus if your conversion rate increases? Or decreases?
Calculating monthly costs might be more hairy at times as well too; say, a fixed monthly cost plus an additional cost that’s a percentage of sales, and then every few months there’s a “one time” fee.
But really, who’s paying attention to any of that stuff?
