How to calculate your Marketing ROI?

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As a result, 61% of marketing managers do not integrate this indicator into their decision-making because they do not trust their own data. It’s crazy when you think about it, right?

Measuring ROI is essential for the growth of your business. So, to help you define, calculate and optimize marketing ROI, we have put together this guide!

In this article:
The definition of Marketing ROI
What is a good Marketing ROI?
How to calculate the ROI of a marketing action?
The special case of inbound marketing campaigns
What tools to track your ROI?
The Importance of Marketing and Sales Alignment
Tips to improve your ROI
What is the definition of marketing ROI?
This acronym, which stands for " Return On Investment " in English, calculates the new zealand email list profit generated when a company invests one euro in one or more marketing strategies. Generally, it is calculated by strategy and/or channel.

We find this notion in email campaigns , content marketing , social media marketing , earn media, SEO , etc.

Knowing the marketing ROI of your campaigns allows you to:

Define the most effective marketing strategies
For example, you can learn what type of ad your audience is most likely to engage with (and convert) on.

Justify marketing expenses
You have tangible data that demonstrates the success of the investment in a tool, channel or platform.

Improve the profitability of future campaigns
By understanding the impact of campaigns on overall revenue growth, you can identify the right techniques to adopt.

What is a good marketing ROI?
A good Marketing ROI ratio of 5:1 is considered.

In other words: for 1 euro invested, you must earn 5 euros.

However, this goal depends on your business, your industry, and the competitive landscape. The more competitive your market, the lower the ROI.

The main goal is to have a positive marketing ROI, initially, to try to optimize it later.

In addition to these factors, the value of your marketing ROI depends on the type of marketing campaign.

For example, a prospect acquisition campaign will certainly have a lower return on investment than a strategy to retain your existing customers.

In the first case, the value of the first purchase does not always reach the cost invested in the acquisition. Result: the ROI can be neutral or even negative. However, you have gained a customer who can become a regular buyer. Hence the importance of calculating your lifetime customer value , a valuable indicator.

As part of a loyalty program, you encourage repeat purchases. Your target already knows you and is (normally!) satisfied with your products or services. It will be easier to convert them, which logically increases the ROI.

How to calculate the ROI of a marketing action?
One of the main challenges in calculating marketing ROI is the measurement approach. The formula to use is simple, but it is still necessary to properly integrate all the elements of each component.

The Simple Formula for Calculating Marketing ROI
The formula for marketing ROI is this:


The result being expressed as a percentage.

For example, if you invested €5,000 in marketing campaigns for the launch of a new service and sales generated €12,000 in profits, your Marketing ROI is:


ROI on income or profit?
The trickiest part of calculating marketing ROI is determining what constitutes your “return” and your true investment. It’s up to you whether you want to consider:

The total revenue generated by a campaign
That is, the income generated by the increase in sales after the launch of a strategy.

Gross profit
Or an estimate of gross profit. This is the revenue minus the cost of goods to produce/deliver a product or service.

Net profit
It corresponds to gross profit minus marketing expenses.

To have a complete overall view, you can calculate the 3 data and evaluate them from one campaign to another.

Remember to factor in hidden costs!
Another essential parameter for calculating marketing ROI: taking into account ALL expenses related to the campaign.

Quite often, there are hidden costs that are not taken into account! It is easy to identify the cost of the marketing tools used, the advertisements launched on the different channels, the influence campaigns or even the rates of the service providers involved.

However, we must not forget the time spent by salespeople convincing prospects, the salaries of your team members, the technical developments necessary for the campaign to run ( creation of landing pages , visuals or videos, etc.) or even sales delayed by possible technical problems on your website.