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ROMI Calculator

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ROMI
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ROMI

ROMI is a vital marketing performance indicator. It indicates the return on investment in marketing campaigns and other brand and product promotion activities. It is not difficult to calculate ROMI manually using a formula, but why do it with a ROMI calculator.

Just a few simple steps - and the finished result is already in front of your eyes. This is the calculator that Yespo has prepared for you. Read further how to use it and for what purpose.

ROMI calculator: online calculation in a couple of seconds

We are glad to present you with a convenient and intuitive to use calculator for online ROMI calculation. To automatically calculate the metric, enter the following data in the appropriate columns:

  • marketing budget;
  • the cost of paying for the work of specialists;
  • cost per click (CPC);
  • conversion into circulation;
  • conversion to sale;
  • average check.

After that, click the "Calculate" button, and get the result in a couple of seconds. You will receive the ROMI indicator and the number of site visitors who received requests and completed transactions.

Similarly, you can calculate ROI - a metric of the return on all investments made in a business, not just marketing ones. Use Yespo's free ROI calculator to simplify your calculations.

How to calculate ROMI manually

How is the specified metric calculated manually if our handy calculator is not at hand? There is a special ROMI formula for this.

Formula ROMI

Let's look at a specific example of how to calculate ROMI using this formula.

Let's say the marketing department spent $ 1000 on an advertising campaign for a product. As a result, the company received an income of $ 7,000. We substitute the data into the formula and get:

ROMI = (7000 - 1000) / 1000 x 100% = 600%

After evaluating the results of this marketing campaign, it becomes clear that every dollar invested in marketing-generated $ 6 in revenue for the business. The actions taken have proven to be very effective.

When filling in the data, please note that marketing costs should include the advertising budget for placement and the cost of the work of specialists involved in the development and customization of advertising.

And all marketing costs are divided into:

  • fixed cost - their size does not depend on external circumstances and the volume of marketing campaigns (the rate of a marketer, advertiser, payment for analytics services and other software, etc.);
  • variables (variable cost) - their size varies depending on the level of marketing activity, for example, the volume of advertising, the number of channels involved, payment for additional promotion methods, etc.

What is the ROMI calculation for?

You need to know the value of Return On Marketing Investment to:

  • see what amount of net profit the company receives after deducting marketing costs;
  • analyze the effectiveness of marketing campaigns and advertising in particular;
  • evaluate the effectiveness of different channels for attracting target audience: contextual, targeted, teaser, banner, native advertising, as well as email newsletters;
  • track the ROI of promotion through content marketing and attract bloggers to advertise products.

How to evaluate the ROMI result

Investments in advertising and promotion are justified if ROMI is positive. For example, ROMI = 100% means that the investment in marketing has paid off twice. If the specified coefficient is 0%, this indicates a break-even advertising and promotion. The higher the percentage, the more profitable the marketing campaign turned out to be. However, it was not possible to get a profit either. Accordingly, an indicator of less than 0% means that the investment in marketing did not pay off, and the campaign was unprofitable.

Please note: when analyzing the return on investment invested in product promotion, you need to take into account short-term and long-term returns. A customer attracted through marketing can make a purchase more than once (take into account repeat sales, cross-selling, payment for a product by subscription with recurring payments). Accordingly, the profit that it brings must be considered in perspective. For this, there is the LTV metric - the profit received by the business over the entire period of cooperation with the client (Lifetime Value - the lifetime value of the buyer). This figure is easy to calculate with our LTV calculator and should always be considered in conjunction with the ROMI value.

Also, keep in mind that there are niches with long lead times where the customer takes a long time to make a purchase decision. These include premium products (real estate and automobile trade, the sale of expensive jewelry, etc.). An advertisement seen by a customer today can only lead him to the sales department in a few months. Therefore, when calculating ROMI for such niches, take a longer cycle for analysis, taking into account the average time for a buyer to decide.

Don't forget: effective marketing increases target audience loyalty and brand awareness, reducing customer churn rate and the time for making a purchase decision. This is why it is important to evaluate metrics based on the niche in which you operate. Successful calculations!

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