WHAT IS RETURN ON INVESTMENT (ROI) AND HOW TO CALCULATE IT

Find below what return of investment is. Find ROI meaning and definition and how to calculate ROI return of investment. Brought to you by MAU. Digital Marketing Specialist at eDigital



WHAT IS RETURN ON INVESTMENT (ROI) ?

Here is the formula to calculate ROI:

ROI = Life Time Value (LTV:Average Margin per Order x Repeat Sales Frequency x Average Retention Time) – Cost per Acquisition (CPA: what we cost us to convert a customer)

HOW TO CALCULATE ROI RETURN OF INVESTMENT?

Example:

Use these values: LTV = $300

CPA = $50 (what costs us to convert a new customer)

ROI = ($300-$50) Overall ROI is $250

Insight: a 400% increase on the CPA.

By gaining a deep understanding of the ROI, you can get a more accurate sense of how your marketing is performing.



WHAT IS RETURN ON INVESTMENT (ROI) AND HOW TO CALCULATE IT

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MAU. award winning digital marketing specialist at eDigital Agency

Award Winner Digital Marketer, top Linkedin Influencer, Certified Facebook / Adwords Professional, Certified SEO Consultant, StartUp Investor, Writer, Speaker. 15+ years optimising some of Australia’s top brands. MAU.trains marketers via Strategy Workshops & Training Sessions inc his popular Digital Marketing Plan & Social Media Plan templates. MAU. enjoys football, latin music & hiking while teaching Digital Marketing or completing creative photography briefs and conceptual photography assignments. Subscribe to MAU.’s e-newsletter connect on LinkedIn Instagram Facebook

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By |January 29th, 2019|Marketing Strategy|