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Return on investment (ROI)

Return on investment (ROI)

Noun

ROI, or return on investment, is a valuable metric in sales. It measures the profitability of an investment, which could be a marketing campaign, sales initiatives or skilling of employees. In B2B SaaS, a good ROI is considered about three or five times the investment.

ROI is expressed either as a fraction or percentage. The calculation for ROI is: Net income / Cost of investment x 100.

Example:

To increase sales, CopyFX invested in a new affiliate marketing campaign that involved training materials, email templates and more. The investment of the campaign was $5,000. After three months, the affiliate partnerships saw an increase in revenue by 33%, resulting in $25,000 more in revenue for the company. The ROI for the campaign was 500%, making it a smashing success.

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