Business, finance and operations
Return on investment (ROI)
- Business, finance and operations
Definition
The gain or loss from an investment compared with what it cost, shown as a percentage.
Also called
ROI, Return on investment
For your role
Choose your role to see what this term means in your work.
Why it matters
It helps decide which projects and campaigns deserve money, as long as everyone measures return the same way.
Where it is used
Business cases, project approvals and campaign reviews. Used by marketing analysts, finance business partners, project sponsors and senior leaders.
How to calculate it
ROI % = (return from investment - cost of investment) ÷ cost of investment × 100
Worked example
Raket Parts B.V. spent a budget of €38,000 on its February 2025 catalogue mailing (campaign X-CMP-2025-01). Enquiries attributed to it led to first orders worth €39,795.
On revenue: ROI = (€39,795 - €38,000) / €38,000 x 100 = 4.7%.
On gross profit at 67.7%: return = €26,941, so ROI = (€26,941 - €38,000) / €38,000 x 100 = -29.1%.
Same campaign, opposite answers. Repeat orders from these customers would add to the return, so the time window matters too.
Raket Parts B.V. is a fictional company created for Insyt.
Definitions vary. "Return" may be revenue, gross profit or cash, over different time windows, and attribution rules decide which sales count. Check how your organisation calculates it.