The ROI Of Doing Nothing

Everybody wants to know the ROI. It’s the first question every marketer is asking when evaluating an idea. We’ve been trained to think of ROI as the output of an input. For example, if you spend $1,000,000 on paid search, how many “widget” sales will you generate? If each widget yields a profit of $1.00, you’ll need to generate 1,000,001 sales to from that paid search campaign to be ROI positive.

I realize that’s a very simple and linear example. But, it works for the purposes of this argument; and here’s why. If I told you the paid search campaign would only generate 500,000 widget sales, there by generating $500,000 in profit, you’d call the $1,000,000 investment unwise since it’s an ROI negative program. On the surface, you’d be 100% correct. But, what if I also told you that if you didn’t do the program, your competition would generate 750,000 incremental widget sales at your expense. In other words, you’d lose 750,000 widget sales to your competition if you didn’t spend the $1,000,000 on the paid search program.

Sure, the paid search program was ROI negative, but not doing to the program was even more ROI negative. Rarely do we consider what happens if we did nothing. From the very simple example above you can see why not doing anything could be the most ROI negative decision you could make.

Chew on that.