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Return on investment (ROI)

This step introduces learners to the return on investment formula and how to use it.
If a campaign generated £12,000 of revenue and cost £3400 to run the campaign, the ROI would be 253%. This means that for every £1 spent, not only did you get that back, but you also made £2.53.

Return on investment is a very common way of measuring marketing spend and its value.

ROI measures the financial investment you are getting versus the financial return that has been driven by this initial investment. Therefore, it carries more weight than the cost per response, as a response may not lead to a sale.

Every company will calculate ROI using figures that are relevant to the product or service they are selling and their position in the market. However, the basic formula for ROI is very straightforward.

You should use this calculation against all of your campaigns to see which ones are delivering the greatest return on investment. This is also important to help justify investing in marketing.

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Introduction to Marketing: Fundamentals of Marketing

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