RETURN ON INVESTMENT
RETURN ON INVESTMENT FORMULA:
(REVENUE - COST) / COST
Insert the gross revenue of your business.
Insert the total cost of all your marketing and advertising activities: media advertising, design, marketing tools etc.
Insert the total cost of all your business operations: Inventory, logistics, human resources, office etc.
Return on Investment measures the profitability and efficiency of your business as a whole. A positive ROI indicates a healthy business model.
Hint: Do not confuse return on ad spend (ROAS) with return on investment.
ROAS measures the return of your advertising budget only, while ROI takes into account advertising, as well as operational costs. Hence ROI is a metric that goes beyond marketing.
Typically companies are looking for a 10X return for every dollar spent. However, this is not a universal truth. A "good ROI" is one that keeps your business healthy and profitable.
How much you should spend on advertising, beyond guesswork
How much does a customer worth for your business?