Return on investment (ROI) is a metric that is used to calculate expected return on investment and to evaluate the profitability and efficiency of it.
Different businesses have different ROI targets for specific actions or channels used. There is no good ROI that fits all, as it depends on the business goals, however the negative ROI should be avoided as if that is the case, then the activity is losing the company money. ROI results can be expressed as ratio or a percentage.
Calculation:
ROI = profit / cost or (profit / cost) x 100%
Example:
Piglet in Bed generated £2,000 in profit by spending £500 on their activity. Their return of investment was 4 or 400% (£2,000/500=4 or (£2,000/500)x100=400%)
