<P> A necessary step in calculating ROMI is the measurement and eventual estimation of the incremental sales attributed to marketing . These incremental sales can be' total' sales attributable to marketing or' marginal .' </P> <P> There are two forms of the Return on Marketing Investment (ROMI) metric . </P> <P> The first, short - term ROMI, is also used as a simple index measuring the dollars of revenue (or market share, contribution margin or other desired outputs) for every dollar of marketing spent . </P> <P> For example, if a company spends $100,000 on a direct mail piece and it delivers $500,000 in incremental revenue, then the ROMI factor is 5.0 . If the incremental contribution margin for that $500,000 in revenue is 60%, then the margin ROMI (the incremental margin for $100,000 of marketing spent) is $300,000 (= $500,000 x 60%). Of which, the $100,000 spent on direct mail advertising will be subtracted and the difference will be divided by the same $100,000 . Every dollar expended in direct mail advertising translates to an additional $2 on the company's bottom line . </P>

Two commonly used methods to improve marketing roi (return on investment) are