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A lot of times, unit economics are hand-waved by product teams because some costs are excluded from the contribution margin or net revenue calculations that maybe shouldn’t be — like headquarters costs, realestate, and so on. The highest ROI tends to be channels like SEO, word of mouth, and other organic efforts.
Data from the 2012 Direct Marketing Association benchmarks say that direct mail — yes junk mail via snail mail — still reigns supreme, offering response rates of 1.1 Digital''s ROI is better than the ROI on analog marketing for one reason: Because it is cheaper. This is only going to get worse. Is it at home?
However, for more complex sales, such as those involving longer sales cycles—like selling realestate or enterprise software—the number of sales alone becomes less reliable. These metrics can also be used to benchmark against other companies. This approach is popularized by Jac Fitz-enz in his book The ROI of Human Capital.
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