Every company exists to turn out a profit someday. Even those startups that can avoid doing so today. That just how capitalism works worldwide, and there's no escape from that reality.  To have a profit, you should earn more than you spend - that sounds simple, but it isn't.

Internet era and it's powerful web analytics created a phenomenon where everybody is looking at the ROI (Return of Investment) of their businesses. That makes sense: you can now understand how much you earn for each dollar you spend on a different marketing channel and adjust accordingly to improve ROI: spending more on what brings better results and less on what drains your coffers.

Let's understand how you can understand and improve the ROI of your company, becoming more profitable in the long run.

What is the ROI?

Let's start by understanding our metric here. ROI (Return on Investment is a performance measure used to evaluate the efficiency of an investment or compare the effectiveness of a number of different investments. It's quite simple, maybe one of the most simple you can find, and important metrics - it's never a vain metric.

This metric measures the amount of return on a particular investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio. The formula is ROI = CURRENT VALUE - COSTS/COSTS. Easy.

It is a popular metric because of its versatility and simplicity - being used in stock markets and by digital marketers alike. Essentially, ROI can be used as a rudimentary gauge of an investment’s profitability. If an investment’s ROI is positive, that investment is profitable, if not, you're doing a loser there. You can compare different ROIs to understand which investment is better for your company.

Let's show an example for you: John has US$ 1,000 invested in Great Game Inc and sells his shares one year later for US$ 1,500. His ROI is 50% because he would take the current value (1,500) subtract his initial cost (1,000) and discover that for each 1,000 invested, he profited 500, which is 50% of 1,000.

He can now compare with other information he might have. Imagine that Joe invested US$ 1,000 on a Google Ads campaign to promote his book "John The Investor", earning US$ 1,200 in the process. He can see that the ROI of this investment was only 20%, at $200 (1,200 - 1000) is only 20% to his initial investment. His best investment? Great Game Inc with an ROI that is more than double that.

Improve ROI #1: Try to be more explicit about what you sell

Now let's see how you can improve ROI on your marketing campaigns. First of all, you have to streamline your content, make it more appealing but also making it more explicit. Try to understand what you sell and what people want to buy and work on this demand - it's easier to sell something that people want to buy beforehand, so always have a look on what people demand.

Then make a free report on these products, with good copywriting, explicating the reasons your customer should buy it - and then direct him to a landing page, where you might capture their emails (this channel has ROIs of over 4,400%!). Send emails from time to time with promotions and discounts.

Once you start your email list rolling around, you will always be making sales. That's a channel you should consider as a core for your company and treat it accordingly.

Improve ROI #2: Understand your sales cycle

Each business is different, with different sales cycles. You have to understand and master yours, which will tremendously improve ROI on whatever you do. What it takes to a customer to make a buy on your site? Do you have to warm him or is he an impulse buyer? Does he convert in a day, a month or a year? Those things matter and require some thinking and testing to know, but once you master it, you're on the good side.

The first thing to understand your business cycle is to understand who is your customer - try to make campaings that are not wide and global, but niche targeted and fine tuned according to your audience. By focusing on the right persons, each campaign will have a better chance to succeed and thus improve ROI. Also, have great landing pages to each stage your client is, to lead then to high engagement and be able to secure his email address.

Once you have their email, gently remind them of your existence from time to time - be it via newsletter, promotions, discounts, there's a plethora of ways. Get good content that leads to engagement. Make he feel like he is a friend of your company and understand all the benefits you're showing to him. If he's engaged, chances are he will be converting soon - some cycles are longer than others and you have to understand and respect that.

And work on remarketing, which is a brilliant method to target audience. The cost of retaining a customer is 3 times smaller than bringing in a new one. Once your audience is created, check who visited & bounced, who has bought, who has filled in the form, who has called. And work these guys out! Send custom ads to this audience with them in mind.

Improve ROI #3: Good and creative content

Maybe the best advice one can have is: have good, strong and creative content that engage people. A engaged reader is much more likely to become a customer. A good copywriter should be writing your emails, with strong content that makes people read, engage, be anxious, forwards your emails. But how do you do that? There's a few tips I can share with you:

Start with #1: a good subject line, which is the essence of a good written email that will make people open and read. Open rates are very important and you should focus on improving it. Once your readers open your emails, you have to engage then with strong and relevant content, maybe using images and videos. Make it remarkable, able to turn readers into customers.

You should use a good email marketing tool: Hubspot, Mailchimp, RD. Those are among the best email tools there are. They have features that will make the most of your email. Always schedule the emails for the appropriate date and time, avoiding off-timing of your audience/customers - if they get your email in the middle of the night, they're less likely to open.

Use call to actions, triggering people to take a step forward: sign-in, subscribe, download, etc. Always check for the hard and soft bounce rates, which plays a very important role in email deliverability. We are going to talk more about it on tip #5, when we talk about email validation.

NEVER buy email list from other people. It might sound easy and fast, but it will do more damage to your business than good. Email lists have to be earned, not bought. And ALWAYS be transparent and truthful in your emails: lies do not convert and propagate the wrong ideas, making your readers dislike you.

Improve ROI #4: Always on the Move

One thing you must learn and understand is that you will always have to experiment, try new things, and tweak what you already have. On your quest to improve ROI, testing and measuring is your biggest friend. Testing is an opportunity to accelerate growth, giving you insight and new alternatives. It doesn't need to be hard: just a few tests each time will do wonders for your company.

Test-and-learn. One action with a target group, a different action with a control group and then compare your results - a simple test A/B. Then make whatever was the best result as a new standard to your marketing process. That will be gold in the long run, always squeezing new good results in the mix.

You can also have a budget exclusive for new tests and experimentations. Like a "improve your ROI budget". If you lose money on this budget, that's ok - it turned out to be new knowledge. And, do like Facebook and "move fast and break things", meaning that you abandon fast failed experiments, instead to let it become a money sink.

One last tip on tests: never test two things at once, only one thing. The results from one experiment may impact on the other and fool you. Do two tests instead.

Improve ROI #5: Email Validation

4,400% is the email marketing channel ROI. That's a very good ROI, and one of the reasons why this channel is so important for many companies, and why you should take good care of it. Sometimes, your ROI might be falling because you haven't been taking good care of it - and email validation might be what may solve it. If you don't use it from time to time, you're going to let your email die, which will damage your ROI. Getting it on the track may be the first thing to improve ROI over time.

If you let it die, the first thing you will see is that it will turn into lost revenue, as your costumers that used to come through it will stop. If you sent an email and had amazing responses (in terms of conversions and sales) before, it will have diminishing returns over time, as your deliverability drops. If you check from time to time, it will naturally end up being better ROI, as you will have only good contacts there.

Sales inefficiency may lead your company into a trap: spend money into new ISPs and ESPs to guarantee that your email marketing will become usable again, taking you out of the spam folders - which has to be accounted for when calculating your email channel ROI. It will take time to warm up these new servers. And if it turns out to be useful still, the same mistakes will end up killing it again, and again, and again and again. Which will make you spend more money on those servers again and repeat the whole process. It's not profitable to do this over and over, and one of the reasons why many companies let it die without bothering trying to save it.

It will start to turn into increased marketing costs, as you turn to more costly alternatives, like Facebook or Google Ads. The ROI on those places can be pretty good; we know that. Are they better than 4.400% (the average on email marketing, according to SendGrid)? No, they're not. They will make the costs of your company skyrocket to figures you won't be comfortable with - and if you make a mistake there - let's say a campaign that delivers almost to no sales -, it will cost you dearly — more than you think.

The benefits of email validation:

1. Lower bounce rate and accurate campaign stats

Bounces are often caused by undeliverability. When you verify email addresses you delete those that are outdated or invalid on your list.

2. Saves money

You won’t pay for the messages to non-existent email addresses. Most marketing tools costs more if you have more leads. You're taking these costs out.

3. Better idea of engaged contacts

You will have more clear data as invalid addresses will be removed from your email list, so you get a better idea of how engaged your subscribers are with specific content.

4. Mail good leads and get more effective targeted marketing

You won’t waste time on inactive contacts as you easily can segment them and target each group with appropriate messaging.

6. Increased Conversion Rates

Remove addresses that will never convert, and increase your rates with an engaged audience.

7. Increased Email ROI, improve your sender reputation and prevent delivery issues

Increase your overall email ROI by eliminating the investment in undeliverable emails, reducing bounces, improving your sender reputation, and providing more accurate metrics for decision making.

So you can see that’s better to verify than send your email campaign immediately.

With our API - available for the primary email marketing tools, like Hubspot, Mailchimp, RD Station, and many others -, you can validate your emails in real-time as soon as you capture them on your site. You can also submit an entire list at once, using CSV, TXT, XLS or XLSX, guaranteeing that your full list gets processed and checked in just a few minutes (about ten faster than most email validations tools). So the next time you send a campaign, it will be sent only to valid emails.

We are committed to helping you on that journey, and that's why we were chosen as the best email validation tool in places like Capterra and Trustpilot - amassing a significant number of clients that are among the biggest companies in the world, such as Netflix and WeWork. In other words, trust us to make your list more trustable. It's our mission. Try our tool for free on this link, and remember that we have customer support 24/7 to listen to you and help you succeed!