Ability to compare businesses of different scales

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Supplement: Know your break-even ROAS
If you use ROAS as a KPI (Key Performance Indicator), you need to calculate the break-even target ROAS using the following formula.

Target ROAS = average customer cost ÷ (average customer cost - cost) × 100 (%)

The break-even point is the point at which sales and expenses match and profits begin to occur. In other words, if your ROAS is lower than 100%, you are not generating sales in relation to your advertising expenses, so you need to make improvements.

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4 Other Metrics to Understand Alongside ROI
In addition to ROAS, there are four other metrics similar to ROI:

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Formula

1 ROE
Return On Equity
A numerical value that measures how efficiently a company is generating profits based on its equity capital
ROE (%) = Net income ÷ Equity capital × 100 (%)
2 CPA
Abbreviation for Cost per Acquisition (or Action)
Cost per customer acquisition
Return on investment of advertising costs per conversion (CV)
CPA = advertising cost / number of actions
3 CVR
Abbreviation for Conversion Rate (= conversion rate)
An indicator showing the percentage of site visits that have been achieved
CVR (Conversion Rate) = Number of conversions (results) ÷ Number of visits (number of sessions) × 100 (%)
4 LTV
Abbreviation for Life Time Value (= customer lifetime value)
The amount of money a customer spends on your company's products and services over their lifetime
LTV = Annual transaction amount of customer x Profitability x Number of years customer continues to be a customer

For example, ROE is a financial indicator used uk telegram phone number list to gauge a company's management efficiency. It can be used to improve management and reform operations to lead to growth.

CPA is also an indicator used when reviewing SEO strategies and advertisements. The lower the CPA, the better the cost performance and the more efficient the advertising operations. Conversely, a high CPA indicates that costs are being incurred.

There are other metrics such as CVR and LTV, so be sure to check the characteristics of each and understand how they differ from and relate to ROI.

3 Ways to Increase Your ROI
Here are three specific ways to improve your ROI:

3 Ways to Increase Your ROI

So, let's take a look at them one by one.

Method 1: Reduce costs
One way to start right now is to cut unnecessary costs.