Questions

What's the easiest way to calculate ROI?

My service delivers sales leads to my clients. Is there any simple calculation for creating an estimated ROI if you don't know each of your client's internal costs per sale?

4answers

So are you trying to calculate their possible ROI?

Roi is simply profit divided by expenses such initial investment and both fixed and variable expenses.

To calculate a buyer of lead's ROI i would aim to average out the cost of leads package versus their average product sold to these leads. And simply follow that formula. You can use this roi % for marketing purposes but without other data you shouldnt use it as a tool for their measurement.

With that said you can also assume the average out the a firm's hourly caller salary, assume the average time to close/how many leads per hour and how many sales per hour from those leads. The cost per caller plus leads used that hour can give you a good Hourly or daily RoI for leads sold to a client.


Answered 5 years ago

My firm often structures our deals this way and we love showing ROI to our customers. The best and easiest way to do this is to ask your client what their average revenue is per sale and average profit margin, and then calculate ROI from there.

It's too complicated to get into the books and show exact ROI, but most customers are just fine using estimated internal costs to prove ROI. We don't pull the trigger on a deal unless we feel we can provide 500% ROI which provides plenty of wiggle room on either side of the deal for unexpected events.


Answered 5 years ago

Have your client create it! Have an outline of the types of costs/time it saves your client and have your client tell you the numbers while you are meeting with him/her. It is believable because your client created it - very powerful tool! Contact me if you want to learn the method


Answered 5 years ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2020 Startups.com LLC. All rights reserved.