Return on Investment (ROI)

Return on Investment (ROI) measures the gain or loss generated relative to the amount of money invested. It is a key performance indicator used to assess the efficacy of an investment.‍

Why It Matters

ROI is crucial in AI Product Management and Product Management as it helps in evaluating the success of investments. It impacts decision-making by providing a quantifiable measure of the financial returns from various projects or initiatives. It is significant in processes and workflows by ensuring resources are allocated effectively to maximize returns.‍

How It’s Used

- In Product Roadmaps: ROI analysis can prioritize features based on potential profitability.
- During Sprints or Team Discussions: Teams can discuss which tasks deliver the highest ROI.
- As Part of AI Workflows or Analyses: Calculating ROI helps in assessing the value of AI initiatives.‍

Related Terms

- Net Promoter Score (NPS)
- Lifetime Value (LTV)
- Customer Acquisition Cost (CAC)‍

Additional Resources

1. KPIs for Product Managers: return on investment
2. What Is ROI? How to Calculate Return on Investment
3. Product Management Training ROI‍

AI Product Management Context

Revo can assist product managers in calculating and interpreting ROI by consolidating data across projects and providing insights to guide strategic decisions. For instance, Revo can help visualize the ROI of different product efforts, enabling managers to make data-driven decisions about where to focus resources.