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What is ROI?

By Scott Max

ROI (Return On Investment) is the economic value generated as a result of different marketing activities. With this data, we can measure the return we have obtained from an investment.

This video will help explain everything:

Why is ROI important?

One of the most important things to keep in mind when we carry out an Inbound Marketing strategy is to check its results and measure its profitability.

ROI is very useful to evaluate this profitability, as it allows us to know how much each euro invested in a campaign has generated in sales.

Calculating it is essential for making decisions about future investments. We will have the information we need to evaluate which projects are the most profitable and, therefore, will show us the path to follow in the future.

How to measure ROI?

One of the most important things to keep in mind when we carry out an Inbound Marketing strategy is to check its results and measure its profitability.

ROI is very useful to evaluate this profitability. It becomes the relationship between the marketing investment and the benefits generated, either direct sales or obtaining leads.

The following formula is used to calculate it:

ROI = (Profit - Investment) / Investment.

Let's see it with an example. If we dedicate 500€ in resources for the realization of an Inbound Marketing course and we obtain, after its completion, 1,500€ of benefits, the return on investment will be 200%. That is, for every euro invested in the course, we get a return on investment of €2 (profit).

This data is fundamental to evaluate a project. If the return on investment is positive, it means that the project is profitable. In the opposite case, if the result is negative, the investment is not profitable and we would be losing money.

Calculating the ROI is fundamental to make the decision of future investments. We will have the information we need to evaluate which projects are more profitable. In addition, they mark the path we have to follow in the future.

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