ROI: What it is, how it’s measured, and other useful information

Kyero team member

What’s the most important thing to consider when you’re deciding which marketing and advertising channels to use to reach your target customer? The answer is indisputably ROI. But what does that mean?

This week on the blog we’re looking at Return on Investment (ROI). What it is, how can you measure it, and why you should sit up and take notice.

We’ve also got some very interesting statistics on the ROI that Kyero delivers for our agents, which will help you understand why our long term clients value working with us so much.

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What is ROI?

Return on Investment is a performance measurement that is used to work out how much money you get back for the amount of money you invest in any given marketing or advertising channel.

To work it out, you simply look at the net profit (i.e. profit after cost) that you’ve made as a result of the money you’ve spent, divided by the cost of that investment and then expressed as a percentage (x 100).

In other words:

ROI = (Net Profit / Cost) x 100

As you can see it’s a very simple calculation, yet a very powerful one.

Why should you care?

By tracking ROI you can compare advertising and investment opportunities across your business, helping you to determine which ones are worth dedicating your budget to.

And by using ROI to review current and future spend, it can help you make informed decisions that will put you on the road to a more profitable future.

Why we’re so proud of Kyero’s ROI

At Kyero, we use the data we’ve collected over many years to calculate the ROI that our agents can expect to earn based on estimated sale and commission figures.

Working on the principle that 1 lead in every 100 results in a sale, and industry average commission rates we can calculate that our agents earn an average of 9€ in commission for every 1€ spent with us – an impressive 900% ROI.

And that’s just for the entry level business package. Here’s how our various levels of investment compare:

  •   Agents on the business package achieve on average 9 x ROI (that’s 900%!)
  •   Agents on the premium package achieve on average 10 x ROI (that’s 1000%!)
  •   Agents on the corporate package achieve on average 11 x ROI (that’s 1100%!)

Which one makes the most sense for you when you crunch the numbers?

If you’re considering investing more heavily in advertising this year, make sure you do the maths to work out where you will see the best return on investment for your money.

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