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Promotion ROI Calculator

Test whether the incremental margin from a promotion exceeded the discount and media it cost.

About Promotion ROI Calculator

Return on investment restates profit as a percentage of the money put in, so a small campaign and a large one can be ranked on the same scale. The return multiple is the gross figure (revenue ÷ cost) that marketing teams usually call ROAS. A promotion can grow revenue and still destroy value; ROI is what tells you which side of the line you are on before you scale the spend.

Formula

Promotion ROI

ROI = (Incremental gross profit from the promotion − Discount plus promotional cost) ÷ Discount plus promotional cost × 100

Incremental gross profit from the promotion
Value returned by the promotion
Discount plus promotional cost
Total cost invested

Worked example

With the default values below, Promotion ROI Calculator returns Return on Investment of 60.00%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Incremental gross profit from the promotionminimum 0
96,000
Discount plus promotional costminimum 0
60,000

Results

Return on Investment
60.00%
Net Return
$36,000.00
Return Multiple
1.60
Revenue Needed to Break Even
$60,000.00
Verdict
Profitable — every unit spent returned 1.6 back

Step by step

  1. 1Values used
  2. 2Promotion ROI
  3. 3Return on Investment= 60.00
  4. 4Net Return= 36,000.00
  5. 5Return Multiple= 1.60
  6. 6Revenue Needed to Break Even= 60,000.00
  7. 7Verdict= Profitable — every unit spent returned 1.6 back

Assumptions and limits

  • The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Promotion ROI calculated?

ROI = (Incremental gross profit from the promotion − Discount plus promotional cost) ÷ Discount plus promotional cost × 100 Return on investment restates profit as a percentage of the money put in, so a small campaign and a large one can be ranked on the same scale. The return multiple is the gross figure (revenue ÷ cost) that marketing teams usually call ROAS.

Why does Promotion ROI matter?

A promotion can grow revenue and still destroy value; ROI is what tells you which side of the line you are on before you scale the spend.

What values do I need to enter?

This calculator takes 2 inputs: Incremental gross profit from the promotion, Discount plus promotional cost. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

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