What is ROI?
ROI or return on investment can be defined as the benefit that an organization gains when it invests in any marketing campaign explains Peter Decaprio. With this, they are able to measure the profitability of their campaigns in relation to the total expenditure for each campaign.
What happens at Aamzing ROI?
There is no rocket science behind calculating the Return on Investment (ROI). At Amazing ROI, we offer a detailed step-by-step process with our easy-to-follow guide that makes it simple to calculate your ROI!
However, To calculate your ROI you need data! Data must include information about four parts: People involved Revenue/sales generated Cost per action Number of conversions we’ll take you through each of these sections in more detail below.
So what you are waiting for? Let’s get started!
Part 1: Revenue/Sales generated
To calculate the ROI, it is crucial to be aware of the revenue made. For example, if your return on investment formula is based on 100 conversions which were accompanied by $100 worth in sales, then the average sale value would be $1 per conversion.
Part 2: People involved
The next step in calculating ROI would be to count the number of people who participated in converting visitors into customers explains Peter Decaprio. This can also include any individuals who helped with making decisions when running campaigns.
Part 3: Cost per action (CPA)
CPA calculates the costs involved per every conversion. These costs include:
The price paid for each action or conversion if any advertising platform, such as Google Adwords is used, then the cost would also take into account the amount of money spent on getting people to visit your site the total expenditure which includes ads and salaries
Part 4: Number of conversions
Now that we have calculated all three parts of ROI, it’s time to put them together! This part is crucial because it helps you determine whether a campaign was worth investing in. To do this simply divide CPA by Revenue/sales generated. This will give you how much you spend per revenue like: $20 (CPA) / $100 (Sales) = $0.20
So here’s the final formula for calculating your ROI: ROI = (CPA / Revenue/sales generated) x 100 So, let’s put all of these steps together to understand how to calculate ROI! Here’s what your calculation will look like: People involved (employees or co-workers): 5 Employees involved in the campaign Sales generated per conversion: $1 Average sale value Cost per action / CPA: $10 Total expenditure Number of conversions produced by campaign: 100 the number of visitors who converted into customers says Peter Decaprio. So, after you have multiplied the revenue generated against the cost per each action, simply divide this number by the total number of conversions and you will get your ROI. Here’s the full formula: (5 (employees) x $1 (revenue/sales generated)) / ($10 (cpa) x 100 (conversions)) = 250% ROI!
This is it! To calculate your Return on Investment, using AamzingROI is as easy as 1 – 2 – 3 !!! You can also learn about marketing and advertising by checking out our blog at www.aamzingblog.com If you have any specific questions please don’t hesitate to contact us at firstname.lastname@example.org We always love hearing from you!
How to Calculate Your ROI? – A Detailed Tutorial within 4 Steps!
Articles like this one appear every day on the Internet offering various ways of calculating your Return on Investment (ROI). In fact, as you will see in a minute all these tutorials offer very similar techniques and tend to give you slightly different results. But, before we get into the four steps for calculating ROI let’s begin by… What is ROI?
Peter Decaprio says ROI is a performance measure used to evaluate the efficiency of an investment. Or compare the efficiencies of several different investments. The “return” in return on investment (ROI) refers to how much money has been made. With an investment relative to some basis. Do not be confused by the term ‘investment’ which means money that you spend on campaigns or ads. Rather than refer to cash that flows into your business as income.
To calculate Return on Investment many people use the following formula:
This formula calculates how much money you have made with your campaign relative to the money you have invested. To do this, simply divide the revenue generated by your investment.