From the course: Actionable Insights and Business Data in Practice

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Solution: What's the ROI?

Solution: What's the ROI?

From the course: Actionable Insights and Business Data in Practice

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Solution: What's the ROI?

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(bright upbeat music) - [Instructor] Well, hopefully you've done your calculations and you're ready to make some recommendations based on ROI. Let's take a look at our first scenario, which is optimizing email campaigns. The first option was to optimize the subject lines with an estimated cost of $5,000 and an estimated return of $10,000. Well, to get the ROI, you take the return, 10,000, subtract the cost, 5,000, to get profits and divide that by the cost of 5,000. That gives you 5,000 divided by 5,000, which is 100%. So you have 100% profit, you double your money by optimizing the subject line, so that's a good approach. The second one is to personalize content with an estimated cost of 10,000, so it costs more, estimated return of 30,000, and the ROI is the return of 30,000 minus the cost of 10,000 divided by the cost of 10,000. So we get a profit of 20,000 divided by a cost of 10,000. That gives us an ROI of 200%, and not surprisingly, 200% is a bigger number than 100%. So our…

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