The main goal of any business is to generate profi

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How to calculate ROI for your store The main goal of any business is to generate profit. We will help you to clarify some aspects related to the financial field of the business, in order to identify the direction in which you are heading. The formula for profit There are two ways to calculate ROI, one simpler and one more complex; the latter is more effective because it also helps you estimate ROI. ROI = (Profit / Realized Investment) * 100 Let's say you invested 10,000 lei in a campaign, and it attracted 100 customers who spent an average of 150 lei on your products. In this case, the ROI calculated as a percentage is 150%: ((150 lei * 100 customers)/ 10,000 lei invested) * 100.



This formula is quite limited because it only takes into account the first British Student Phone Number List purchase made by a customer, even if they return with a subsequent purchase. ROI (Average CLV * No. of customers) / Realized investment) * 100 CLV = customer lifetime value If we assume that the 100 customers would spend an average of 150 lei per year, for five years on average, then the average CLV would be 750 lei. In this case, the calculated ROI percentage would be 750%, a percentage 5 times higher than in the case of the first formula, because we take into account the income during the entire lifetime of the customers: (750 lei * 100 customers) / 10,000 lei invested) * 100. The recommendation is to calculate the ROI for each promotion channel you use, as the return may vary from one promotion source to another; in this way you will be able to conclude which are the most profitable channels through which you can promote yourself and you will be able to direct your attention to them with priority.






How to check performance metrics for ROI There are five ways you can check your ROI performance metrics: Total traffic generated It represents the total number of visitors that were attracted to your web page, as a result of your promotion. The higher the traffic, the higher the possibility of increasing the conversion rate. In order to be able to identify the ROI value as accurately as possible, it would be ideal to analyze the traffic generated and the type of traffic: directly, from social networks, generated as a result of the recommendation, via email, pay-per-click or organic. After this analysis you will be able to conclude which are the most profitable promotion strategies. Conversion rate It represents one of the most important indicators when it comes to analyzing the profitability of an investment. It is much more useful to determine the number of users who were converted into paying customers than to refer only to the traffic generated on the site.