Test whether the incremental margin from a promotion exceeded the discount and media it cost.
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.
Promotion ROI
ROI = (Incremental gross profit from the promotion − Discount plus promotional cost) ÷ Discount plus promotional cost × 100
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.
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.
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.