What is return on investment (ROI)?

Hi, this is Lou Peck from The International Bunch, and I'm going to talk to you about Return on Investment or ROI in under 60 seconds.

ROI is the ratio between gain, so profit over a set time period or positive results like the number of sales leads from a conference, and the cost of investment like staff time and effort, event and paid social costs etc.

A high ROI is positive as it shows little effort with high impact or big costs with even bigger gain.

You want to deep dive into statistics to measure your campaigns and analyze their effectiveness ultimately resulting in what you should change, keep and stop doing. Establish benchmarks to measure ROI for more informed decisions. Think about it as what we do versus what we gain.

A simple example is:

(Sales Growth - Marketing Cost) / Marketing Cost x 100 = ROI %

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