Glossary

Return on Investment (ROI): Definition and Calculation

Return on investment measures what a spend brings in relative to its cost. Here's the calculation, how to interpret it, and its limits.

Return on investment, or ROI, measures what a spend brings in relative to what it costs you. You calculate it by subtracting the cost from the gain generated, then dividing by the cost, all as a percentage. It's the go-to metric for judging whether an action was worth carrying out.

How to interpret it

A positive ROI means the action brought in more than it cost; a negative ROI, the opposite. But the number alone isn't enough to decide. A high ROI on a small spend can weigh less than a modest ROI on a large volume. Set against customer acquisition cost, ROI places each euro spent within a logic of overall profitability, not just isolated efficiency.

Its limits

ROI has two blind spots. Time first: it doesn't say how long the gain takes to arrive, yet a profitable but distant action can be worth less than a more modest but immediate one. Indirect effects next: an action can pay off in reputation or relationships without showing up in the calculation. ROI informs a decision; it doesn't replace it.

How Kaptor improves your ROI

Kaptor relies on channels where effort counts more than budget: targeted prospecting, visibility, SEO. By avoiding paying for each contact and improving your conversion rate, it pulls your profitability up. To see this lever at work, explore sales prospecting.

Frequently asked questions

How is ROI calculated?

Subtract the cost from the gain generated, then divide by the cost. A gain of 300 on a spend of 100 gives an ROI of 200 percent.

What's a good ROI?

A positive ROI means the investment brought in more than it cost. The acceptable threshold depends on your business and the risk taken.

What are the limits of ROI?

It ignores time and indirect effects. An action with a modest but quick ROI can be worth more than another that's more profitable but far off.

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Return on Investment (ROI): Definition and Calculation