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.
ROI = (Gain from Investment - Cost of Investment) / Cost of Investment × 100
Affiliate ROI = (Revenue from Affiliates - Affiliate Program Costs) / Affiliate Program Costs × 100
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Investing $25,000 in affiliates and generating $100,000 in revenue = 300% ROI
A 4:1 LTV:CAC ratio typically translates to 300% ROI over customer lifetime
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...The all-in-one affiliate management platform for SaaS companies.
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