What is the meaning of ROI?
In simple terms, ROI is a business ratio that shows your profit in relation to your expenditure. As an entrepreneur, you can use the return on investment to measure the profitability of your investments in numbers - so it's the return on investment, so to speak.
In sales, return on investment can help you examine your financial investments closely to draw appropriate conclusions regarding sales performance.
In this way, unnecessary investments can be avoided next time and the money can only be targeted where an appropriate return on investment is achieved.
In marketing, ROI is used in particular to plan how efficient an advertising campaign will be. Here, return on investment represents the ratio between the capital used for advertising as well as the profit generated from it.
In summary, the function of ROI is to help you determine whether and to what extent an investment will pay off and, at the same time, how profitable it actually is.