Marketing ROI calculator
Marketing ROI is (revenue from marketing − marketing cost) ÷ marketing cost × 100. Bring in $40,000 from $8,000 of marketing and that is $32,000 of net profit, a 400% return, and $5.00 back for every dollar spent. Anything below 0% cost more than it returned.
Two numbers, one honest answer
Only revenue you can genuinely attribute to marketing. Use gross profit instead if you want the stricter answer.
Ad spend plus management fees, CRM, creative and any per-lead purchase costs.
Every dollar spent came back with $4.00 of profit attached.
Revenue left over after the marketing bill was paid.
Revenue divided by cost. Counts the original dollar as well as the profit.
Below this the campaign is costing you money, whatever the platform reports.
How far revenue could fall before this stops paying for itself.
How to use this calculator
Pick one period — a month is usual — and enter two numbers: the revenue you can honestly attribute to marketing, and everything marketing cost you in that same period. The results update as you type. Keep both boxes on the same basis: same period, same channels, same definition of a sale.
The second box is where most calculations go wrong. Ad spend alone is not marketing cost. Management fees, CRM and dialler subscriptions, creative production and per-lead purchase costs are all money spent to acquire the job, and leaving them out makes a channel look far better than it is right at the moment you are deciding whether to increase its budget.
A worked example
An HVAC company spends $8,000 in a month — $6,200 on Google Ads, $1,300 in management fees, $500 in CRM and call tracking. Jobs traced back to those campaigns billed $40,000.
Net profit from marketing is $32,000. ROI is $32,000 divided by $8,000, or 400%. The payback multiple is 5.0x, and marketing consumed 20% of the revenue it produced. Revenue could fall by $32,000 before the channel stopped paying for itself.
Run the same month using gross profit instead of billed revenue. At a 45% margin, $40,000 of revenue is $18,000 of gross profit, so ROI drops to 125% and the multiple to 2.25x. Same campaign, same month — and a very different conversation about whether to double the budget.
What a good and a bad result look like
- Strongly positive on gross profit. The channel is genuinely funding the business. The question stops being whether to spend and becomes how much more you can spend before returns compress.
- Strongly positive on revenue, thin on gross profit. You are buying work at close to cost. Common when discounting to win jobs, and it usually shows up as a busy crew and a flat bank balance.
- Slightly negative. Fine in the first month of a new channel while it gathers data. After ninety days it is a targeting, follow-up or offer problem, not a patience problem.
- Deeply negative. Something structural is wrong — wrong audience, wrong service advertised, or leads arriving and nobody working them. More budget makes this worse, not better.
The common mistake
Crediting marketing with revenue it did not cause. Referrals who happened to click an ad, repeat customers who searched your brand name, and jobs that were already sold before the campaign started all get swept into the revenue box, and the return goes up without anything real changing. Ask every caller how they found you and reconcile that against what the platform reports. Where the two disagree, trust the caller.
The second mistake is timing. If jobs sign three weeks after the enquiry, this month revenue came largely from last month spend. Dividing one by the other flatters you in a month you cut budget and punishes you in a month you raise it. A rolling ninety-day window removes most of that.
Once you know the return, find out what is producing it. The cost per booked job calculator shows which funnel stage is eating the spend, the ad budget calculator works backwards from a revenue goal to the spend it requires, and the ROAS calculator gives the ad-account view of the same period.
Common questions
What is marketing ROI?
Marketing ROI is the profit marketing produced expressed as a percentage of what marketing cost. The formula is revenue attributed to marketing minus marketing cost, divided by marketing cost, times one hundred. Forty thousand dollars of revenue from eight thousand dollars of spend is thirty-two thousand in net profit and a 400% return, which is the same thing as five dollars back for every dollar in.
What does a negative marketing ROI mean?
It means the campaign returned less money than it consumed. A return of minus 25% on ten thousand dollars of spend produced seventy-five hundred dollars of revenue, so twenty-five hundred dollars left the business and did not come back. Negative returns are normal in the first weeks of a new channel while it is still learning, and a serious problem after ninety days.
Should the revenue figure be gross revenue or gross profit?
Either works as long as the cost side matches and the number is labelled honestly. Gross revenue produces a bigger, flattering percentage that ignores the cost of delivering the work. Gross profit produces the figure that actually tells an owner whether to keep spending, because a job sold at break-even contributes nothing regardless of how cheaply the lead was bought. Contractors running thin margins should use gross profit.
What counts as marketing cost?
Every dollar spent to make the phone ring: ad platform spend, agency or management fees, CRM and dialler subscriptions, per-lead purchase costs, landing page or creative production, and any commission paid on marketing-sourced work. Excluding management fees is the most common distortion, because it can make a channel look twice as efficient as it is on the way to a budget decision.
What is a good marketing ROI for a home-service contractor?
Targets vary far too much by trade and ticket size for a single benchmark to be useful, but the structural test is the same everywhere: acquisition cost has to sit comfortably inside gross profit per job with room left for overhead. Businesses with high ticket values and healthy margins can tolerate returns that would bankrupt a low-ticket repair operation, so compare against your own margin rather than a published figure.
What is the payback multiple and how is it different from ROI?
The payback multiple is revenue divided by cost, so it counts the original dollar as well as the profit. ROI counts only the profit. Five dollars back for every dollar spent is a 5x multiple and a 400% ROI — the same performance described two ways. The multiple is easier to say out loud, the percentage is easier to compare against other uses of the money.
Why does attribution make marketing ROI unreliable?
Revenue only counts as marketing revenue if marketing genuinely caused it, and most contractors have no clean way to separate a Google Ads job from a referral who happened to click an ad on the way. Over-crediting inflates the return and hides a losing channel. The practical fix is asking every caller how they found you and reconciling that against platform-reported conversions rather than trusting either alone.
Over what period should marketing ROI be measured?
Long enough for the sales cycle to complete. If jobs typically sign three weeks after the first enquiry, this month revenue was largely produced by last month spend, and dividing one by the other will overstate the return whenever budget is falling and understate it whenever budget is rising. A rolling ninety-day window removes most of that distortion without needing full cohort tracking.
Keep going
The ad-account view of the same question: revenue divided by ad spend, plus your break-even point.
Free tool Cost Per Booked Job CalculatorWhere the return actually comes from — the funnel stage that is quietly eating your spend.
Free tool Ad Budget CalculatorWork backwards from a revenue goal to the monthly spend it really takes to hit it.
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