Return on Investment (ROI) Calculator
Calculating your Return on Investment, or ROI, is essential for any busines owner. It helps not only to determine profit margins but also helps in understanding the value of money spent on marketing activities.
It is versatile, yet simple. ROI can be used as a down-and-dirty method of determining the results of a marketing campaign’s profitability. The calculation itself is not too complicated. The interpretation of the results can lead to finding other avenues of marketing that may be more profitable or provide validation that marketing efforts are on track. If your ROI is less than 100%, then you probably need to tweak your marketing efforts or find other avenues of marketing that will produce better results.
A Return on Investment (ROI) calculator, like the one we use on this site, will give you your ROI as a percentage and give you the guidelines to evaluate that percentage as well.
Evaluating Your ROI
When using an ROI calculator, it is important to know how to evaluate the results. If your results are poor, fair, or even good, there can be room for improvement. If you have excellent results, then you know you are on the right track with your marketing efforts.
POOR – Any ROI that is less than 100% indicates a poor return on investment. When dealing with marketing, this would be a sure sign that your marketing needs an alternate source!
FAIR – An ROI that falls between 100-200% should be considered fair. While you’re making money off of your marketing efforts, you could probably benefit from a tune-up of your efforts.
GOOD – An ROI that falls between 200-500% is considered good and nothing to be scoffed at. Depending on your marketing channels, there is still a good chance for improvement by tweaking your strategy.
EXCELLENT – Any ROI that is more than 500% should be considered excellent. You’re getting great results from your marketing efforts. However, you can always benefit from another set of eyes looking at your strategy. You never know what might show up as a new and exciting option!