ROI

ROI, or Return on Investment, is a metric used to determine an investment’s efficacy, calculating whether it has earned a profit or incurred a loss. When expressed in a formula, it accounts for the profit or loss divided by the total investment and multiplied by 100. It’s expressed as a percentage. Here’s how:

(Profit or loss / Total investment) * 100 = ROI

If a business recorded a net profit of $400 in January with $100 as the cost of running the business, the ROI would be 400%.

While good ROI varies from industry to industry and brand to brand, measuring ROIs is a great way to track a brand’s growth, like how much email marketing has helped sales grow or which was the best-performing element of a campaign. This data allows brands to strategize better when creating future email marketing campaigns.