“ROI” stands for “Return on Investment.” It is a performance measure used to evaluate the strength of a particular investment, or to compare various investment options against each other.

To calculate ROI, the benefit (return) of the investment is divided by the cost of the investment, and the result is expressed as a percentage or ratio.

As an example:
If a marketing campaign will cost $20,000 and generates $30,000 in sales, the return is $10,000.
Divide the return of $10,000 by the original cost of $20,000, and the ROI is .5, or 50%.

ROI is a very popular metric in business because of its simplicity. It helps answer questions such as, “Should we make this investment? Which of these investment options will give us the greatest benefit?”

The higher the ROI, the better the investment. And of course, you never want to make an investment with a negative ROI!