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SaaS Metrics

Return on Investment (ROI)

A performance measure used to evaluate the efficiency of an investment, calculated as the gain or loss relative to the amount invested.
Updated 1/15/2025
2 examples

Return on Investment (ROI)

Return on Investment (ROI) is a performance metric used to evaluate the efficiency and profitability of an investment. In affiliate marketing, ROI helps determine whether affiliate programs generate sufficient returns to justify their costs.

Calculating ROI

Basic ROI Formula

ROI = (Gain from Investment - Cost of Investment) / Cost of Investment × 100

Affiliate Marketing ROI

Affiliate ROI = (Revenue from Affiliates - Affiliate Program Costs) / Affiliate Program Costs × 100

Example Calculation

  • Revenue generated: $100,000
  • Affiliate commissions paid: $20,000
  • Program management costs: $5,000
  • Total costs: $25,000
  • ROI = ($100,000 - $25,000) / $25,000 × 100 = 300%

Industry ROI Benchmarks

Affiliate Marketing ROI

  • Excellent: 400%+ ROI
  • Good: 200-400% ROI
  • Acceptable: 100-200% ROI
  • Poor: Below 100% ROI

Calculate your affiliate program ROI with our tools:

Ready to maximize your affiliate marketing ROI? Start by accurately measuring your current returns.

Examples
1

Investing $25,000 in affiliates and generating $100,000 in revenue = 300% ROI

2

A 4:1 LTV:CAC ratio typically translates to 300% ROI over customer lifetime

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Customer Acquisition Cost (CAC)

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Freemium

Table of Contents
Return on Investment (ROI)Calculating ROIBasic ROI FormulaAffiliate Marketing ROIExample CalculationIndustry ROI BenchmarksAffiliate Marketing ROI
Related Terms

Customer Acquisition Cost (CAC)

The total cost of acquiring a new customer, including all sales and marketing ex...

Customer Lifetime Value (LTV)

The total revenue a business expects to generate from a customer throughout thei...

Affiliate Marketing

A performance-based marketing strategy where businesses reward affiliates for ea...

Commission

The payment or percentage of sale that an affiliate earns for successfully promo...
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