Sales Glossary > Return on Investment
Return on Investment
Return on Investment (ROI) is the percentage of profit generated as a result of a purchase or strategy compared to the cost the initial investment incurred.
When evaluating business decisions, it’s important that they are profitable and generate a positive ROI.
The ROI formula is net return divided by the cost of investment, then multiplied by 100 for a percentage.
For example, if your sales automation software costs you $200 per month, but you make an additional $1000 per month, your ROI would be $800 (net return) / $200 (cost) * 100, resulting in a 400% ROI.