Overview
ROI expresses net gain relative to cost. It turns initiatives into comparable percentages so you can rank opportunities.
ROI expresses the return relative to cost as a percentage and evaluates investment efficiency.
Definition
Use incremental lift versus a baseline and consistent attribution windows. Pair ROI with quality metrics to avoid optimizing vanity gains.
Return on Investment expresses net gain relative to cost as a percentage. Use incremental lift versus a baseline and consistent attribution windows. ROI helps decide where to allocate budget across campaigns, features, and operations.
Formula
Use net gains.
Compute (Gain − Cost) / Cost × 100% using net gains over consistent windows.
ROI = (Gain − Cost) / Cost × 100%Use the ROI to run this formula with your own numbers.
Example
$40k gain on $10k cost → 300%.
Provide a gain and cost example and explain incremental vs gross ROI.
Common pitfalls
Attribution errors, using gross instead of net gains, and ignoring time value can inflate ROI.
- Attribution errors
- Using gross instead of net gains
- Ignoring time value of money
Benchmarks
ROMI often 100–300% for strong campaigns; varies widely.
ROMI often 100–300% for strong campaigns; context varies widely.
Notes
Use incremental lift versus baseline and align windows across channels.
- Use incremental lift vs baseline
- Apply consistent attribution windows