Predicting ROI From eBusiness Strategies (Part 1)

09/24/2001

As CEO of three prior companies, I often found myself evaluating every investment or business initiative in terms of its effect on my P&L.

Some investment decisions were easier to make than others. Production-related investments for tools and equipment were obvious, but marketing and sales investments were harder to predict – unless you had specific experience in and tracking of marketing investments similar to the one you’re about to make, you were left to guess and speculate.

Earlier in the life of the Internet and WebMetro, I found it difficult to predict ROI’s for clients for lack of enough industry experience. Thankfully, like most early adapters, our clients were willing to take the risk with Internet initiatives. After we planned, developed and tracked response with them, many of our clients reported accelerated business growth as a result and a positive ROI.

As the Internet has improved, predicting ROI has improved, particularly in the areas of operations and transaction-related initiatives (or applications). However, since eBusiness does not have a traditional “manufacturing” component from which to track, ROI in general remains a mixture of science and art. Of course, this depends on the P&L category to which the initiative is applied.

In this context, eBusiness initiatives are not any riskier than most decisions CEO’s and senior managers make on a daily basis. The bottom line is that evidence of the viability of the Internet as a business tool (both for conducting as well as building business) is visible almost every place you look. Nevertheless, it requires the same dedication to vision, level of commitment, and business savvy as any other business initiative you carry out.

In my next letter to you, I will provide some specific guidelines that will help your business minimize the risk of an eBusiness strategy and provide you some ROI predicting tools. Any questions in the meantime, please feel free to call me so I can help you answer them; or email me at ugaldecv@webmetro.com if this would be an easier way for you to communicate. We’re here to help you any way we can.

For more information on Internet marketing visit WebMetro: Online Marketing