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Return on Investment
This workbook supports the Return on Investment topic at qlutch.com
If a worksheet has gray and white cells, the white cells inside the gray area are inputs and the results will be displayed in a printable format in the white area of the sheet. If a worksheet is all white, then the
inputs and printable report are the same. Some of the worksheets are linked to previous worksheets. Feel free to enter numbers into previous worksheet cell references if you haven't completed the
previous sheets. Calculations and formulas aren't protected, so check blank cells in the report sheets before entering values.

Some of the worksheets have tables with summary calculations at the end of the table. If you need to insert more rows, insert them in the middle of the data entry fields so the sum formulas capture the new
fields. Some of the worksheets have hidden rows or columns for formula calculations and deleting them will modify some of the features. If you modify worksheets and wish to return to the original format,
simply download a fresh copy from your account at www.qlutch.com.

© Copyright Qlutch Marketing, Inc. 2018

27.10.a Cost of Goods Calculation - Product

Calculate the cost of goods for a product if your finance team doesn't have the figure.

Results Calculates COGs for a product.

27.10.b Cost of Goods Calculation - Service

Calculate the cost of goods for a service if your finance team doesn't have the figure.

Results Calculates COGs for a service.

27.10.c Cost of Goods Tracking

Track your COGs over time.

Results Keep your historical COGs in one place for easy reference.

27.10.d ROI-Based Marketing Budget Calculator

Determine the appropriate size of your marketing budget based on your annual goals & threshold ROI.

Results Calculates your marketing budget maximum based on your ROI goals and revenue goals.

27.10.e Marketing Investment

Quick tally for budget items to use in a marketing campaigns.

Results Totals a list of marketing costs.

27.10.f Marketing ROI Calculations

Determine a projected ROI or actual ROI for a marketing campaign, using one of three different methods: COG Method, Gross Profit Method, or CLV Method.

Results Calculates ROI for a marketing campaign.

27.10.g Alternate ROI Calculations

Determine a projected ROI or actual ROI for a marketing campaign, using alternate methods.

Results Calculates ROI for a marketing campaign.

27.10.h Incremental ROI Calculator

Determine the incremental ROI for increasing marketing expenditure -- to determine net ROI including the additional investment.

Results Calculates projected ROI for a marketing campaign with increased expenditures.

27.10.i Marketing ROI Tracking Sheet

Track ROI for your campaigns.

Results Organizes all your marketing ROI results.

27.10.j Sales Process Reference

Records your sales process conversion rates in case you haven't completed 5-Sales Process.

Results Calculates conversion rates at each step in the sales process, as well as a final customer conversion rate.
 Cost of Goods Calculation - Product
Calculate COGS per unit if your accountant/finance team cannot provide that figure.

Product / service

Time period:

Total for time

Total expenses during the time period above
period
Raw materials used to produce the product

Total materials $ -

Labor specifically to produce the product (ie laborers who are assembling)

Total labor $ -

Shipping & inventory of raw materials to your production facility

Total shipping & inventory $ -

Production facility expenses (if facility is solely for this product; or use a % of
overhead)

Total production facility $ -

Other: Some companies include an allocation for overhead, customer service,

order processing, or other items in their COGs figure. See your accountant.

$ -
TOTAL COGS $ -

Number of units sold during the time period

COGS per unit #DIV/0!

606223062.xls - a 2
 Cost of Goods Calculation - Service
Calculate COGS per unit if your accountant/finance team cannot provide that figure.

Product / service:

Time period:

Total for time

Total expenses during the time period above
period
Labor to deliver your service

Total $ -

Cost of any materials used in the delivery of your service

Total $ -

Other variable costs directly related to the delivery of your service

Total $ -

Other: Some companies include an allocation for overhead, customer service,

order processing, or other items in their COGs figure. See your accountant.

Total other $ -
TOTAL COGS $ -

Number of units sold during the time period

COGS per unit sold #DIV/0!

606223062.xls - b 3
 Cost of Goods Tracking
Track your COGs over time.

Product or service COGs Update date Next review date

606223062.xls - c 4
 ROI-Based Marketing Budget Calculator
Determine the appropriate size of your marketing budget based on your annual goals & threshold ROI.

Notes
Different companies include different expenses in their ROI calculations. A traditional "textbook" calculation is ROI = ((Revenue - COGs) - investment)/investment.

However, that calculation may not be a true indicator of the profit that your marketing investment earns for the company because it doesn't include variable incremental expenses
incurred with the sale of a particular product (for example, a sales commission that must be paid) or an allocation for overhead or fixed costs that the company needs to cover.

If you're using the traditional formula, your ROI figure will be much higher than the formula that includes overhead and incremental expenses. However, the latter calculation is a truer
measure. See your finance team for assistance.

FULLY LOADED FORMULA

If you're going to include these expenses in your ROI calculation, list them below; otherwise, skip to the ROI
Calculation.

Time period:
Product

Overhead allocations

Total overhead $ -
Total revenue projected for the time period
% of revenue to allocate to overhead #DIV/0!

Incremental expenses incurred in the sale of a product: List the

additional expenses that should be covered in your ROI formula. These are
expenses that AREN'T included in the overhead figure above.

Total incremental expenses $ -

TOTAL FULLY LOADED EXPENSES $ -
This will be subtracted from revenue in the ROI calculations below.

Hurdle rate based on existing budget

This section will give you your anticipated ROI based on your existing budget.

Budgeted figures Value

Annual revenue A
Cost of Goods B
Gross profit (A-B) $ - C
Additional expenses (from above, if using) $ - D
Marketing budget E
Expected ROI on marketing budget: (C-D-E)/E #DIV/0!

Determine budget based on hurdle rate

This section will give you a marketing budget projection based on your hurdle rate.

Time period:

Goal Value
Revenue goal F
Expected COGs G
Expected gross margin (profit) (F-G) $ - H
Additional expenses (from above, if using) $ - I
Desired ROI (your hurdle rate) J
Marketing budget (G-H)/(J+1) $ -

606223062.xls - d 5
 Marketing Investment
Quickly tally the items in your campaign.

List all of the budget items for this campaign --

costs that are just for this campaign and cannot
be recovered once implemented Cost

Total $ -

606223062.xls - e 6
 Marketing ROI Calculations
Project your ROI for a campaign.

To calculate a net ROI, enter your overhead and incremental expenses. Otherwise, jump below to the calculations.

Overhead -- % of revenue to allocate #DIV/0! From worksheet a.

Incremental costs per unit sold

Basic Calculation with COGs Basic Calculation with Gross Profit %

Marketing investment A Marketing investment A

Total units sold Total units sold

Price per unit Price per unit
Total revenue $ - B Total revenue $ - B

Cost of goods per unit Gross Profit % C

Total COGS $ - C
Gross Profit (B-C) $ - D Gross Profit $ - D

Overhead allocation (if using) #DIV/0! E *Calculated from above Overhead allocation (if using) #DIV/0! E *Calculated from above
Incremental costs (if using) $ - F *Calculated from above Incremental costs (if using) $ - F *Calculated from above

ROI: (D-A-E-F)/A #DIV/0! ROI: (D-A-E-F)/A #DIV/0!

Using Customer Lifetime Value

(As long as your CLV is based on profit, not gross revenue [Customer Lifetime Value can help])

Marketing investment: A
# of new customers B

Value of each new customer (CLV) C

Projected profit $ - D

ROI (D-A)/A #DIV/0!

606223062.xls - f 7
 Alternate ROI Calculations
Project your ROI for a campaign using other criteria.

Campaign
What is your success measurement (X) for the campaign?
(For example, meetings, click-throughs, newsletter signups, proposals, etc.)

Cost per "X"

An alternate measure of campaign success – you can use it to compare campaigns and
invest in those that are producing the most X at the lowest price.

Total marketing investment in the campaign A

Number of X delivered by the campaign B

Cost per X* (A/B) #DIV/0! C

ROI based on Projected Revenue

You can project an ROI on the campaign if you can answer these questions:

Of the prospects who get to step X, what percentage of them will D *If you've defined your sales process, reference this
figure there. If not,worksheet j can assist.
typically become customers?

Number of customers anticipated from the campaign (B*D) - E

Now choose whether to calculate your ROI based on LIFETIME VALUE or Revenue / Gross Profit for this single purchase
Average lifetime value F
*Can be calculated in 28.3 - CLV Calculation
Total value delivered (E*F) $ - G

ROI based on average lifetime value (G-A)/A #DIV/0!

OR
H
Total units sold from the campaign
Revenue per unit I

Total revenue (H*I) (or just enter the total manually) $ - J

COGs per unit K

Total COGs (H*K, or just enter the total manually) L

Gross Profit (J-L) $ - M

ROI based on Revenue/Gross Profit (M-A)/A #DIV/0!

606223062.xls - g 8
 Incremental ROI Calculator
Determines the incremental ROI for increasing the expenditure, so you can determine your net ROI including the additional investment

Campaign Name

Projections for
ADDITIONAL
Current Campaign New Campaign Total
campaign
contribution ONLY

Marketing investment $ -
# of impressions a a $ -
Expected response rate c c #DIV/0!
Total responses: d = a * c d - d - -
% of responses that will become customers e e
# of customers: f = d * e f - f - -
Value of each new customer (CLV) g g $ - $ -

Total projected profit h $ - $ - $ -

Investment i $ - $ - $ -
ROI: j = (h - i) / j j #DIV/0! #DIV/0! #DIV/0!

ROI
Hurdle rate
Current Campaign #DIV/0!
Increased Investment #DIV/0! * Decision
Revised ROI* #DIV/0! #DIV/0!
*If increased investment ROI is negative, you may choose not to implement, even if it still produces a revised ROI higher than your hurdle rate.

This is the ROI to consider when increasing the investment

606223062.xls - h 9
 Marketing ROI Tracking Sheet
Track the ROIs for your campaigns. Categories (if using) Hurdle rate

Length of Marketing Success Criteria Date last

# Campaign name Date launched Portfolio Category Projected ROI Actual ROI Hurdle rate Cost per X
campaign Investment (X) updated
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

606223062.xls - i 10
 Sales Process Reference

This sheet is part of Sales Process subject; it documents the steps your prospects take in their
buying process, then estimates the percentage that move from one step to the next.

If you need your quick process for sheet g, use this sheet.

Calculation:
Of those who reach this
Cumulative % of total
Step # Customer buying step step, what % of them will
prospects who reach
move forward to the next?
this step

1 100.0%
2
3
4
5
6
7
8
9
10

Close ratio: % of total

prospects who become 100.0%
customers

606223062.xls - j 11