Evaluative Metrics

Return on Investment (ROI)

Return on Investment (ROI) or Return on Marketing Investment (ROMI) equals the gain from a program minus the cost of the program, divided by the cost of the program. ROI = (gain – cost) / cost For example: Let’s assume…

To Measure ROI, Use Gross Profit

Some marketers use sales revenue to measure ROI. But it is much preferable to use gross profit (also called gross margin). Why? Because if you use gross profit, you will be speaking the conservative language of your CEO and CFO. Here is a detailed example:…