ROI Do’s

Be clear on what you are really trying to determine. Competitive ROI may not be so important vs. tactical ROI, which could be very important.

Be clear on the intention of ROI analysis, understand what the analysis is telling you and be clear yet flexible on hurdle rates.

Use ROI as a tool for better understanding of the business and financial impact. Understand why ROI results are the way they are. ROI will frequently bring to light areas that significantly impact your business. Understand these variables well and you’ll have a much better understanding of the levers to push or pull to make an effective deployment, acquisition or partnership.

Understand ROI is an estimate.

ROI Don’ts

Fixate on the number. Ten percent, 25 percent or break even is meaningless if you don’t understand what the key variables are that get you there. An understanding of ROI analysis may generate ideas for new ventures with better economics based on your learnings.

Use ROI as the end-all and be-all of analysis. Competitive pressures and industry dynamics may make ROI the 10th rather than the primary consideration when determining to move, wait or discard a particular proposal.

Do ROI for the sake of doing ROI.

Use ROI for independent projects when the project fits into a bigger picture.

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