Loading...
Answers
MenuWhat'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?
Answers
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.
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.
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
There are two formulas to calculate ROI.
1. ROI=Cost of Investment/ Net Return on Investment×100%
2. ROI=Cost of Investment/Final Value of Investment − Initial Value of Investment×100%
You can read more here: https://www.investopedia.com/articles/basics/10/guide-to-calculating-roi.asp
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
Related Questions
-
What's a reasonable profit margin on merchandise?
Are you the manufacturer or reseller? If you are the reseller, typically about 40-50% above cost. Use the MSRP as an indicator.ZR
-
Whats the best way to find commission sales reps?
This is not my specialty, however, I have been in your position many many times -- maybe this will help. If the product is in-tangible, then look for JV partners on the Internet. Try to find an expert that deals with these JV opportunities (like me). If the product is physical, then look for sales organizations that have networks of sales people across the country. You do the deal with the organization and the independent network of sales people sells your product. It's a sweet setup if you can negotiate a margin that works for everyone. Hope that helps - Cheers - NickNP
-
How can a small offshore development company find companies/software sales people to sell their service in the US/UK?
My company does a lot of consulting with offshore firms who are looking for a way to generate new business, so I hear this question a lot. My first reaction is that you need to totally reverse your mindset when you talk about your own company. You mentioned that you have: a great software developers team, proven track record, passion, real value But, everyone says that. There a 10,000 companies that have those things, so a customer isn't going to notice it. You need to figure out what your company is best at (doesn't have to be technical) and present it as a solution to a specific problem that clients have. Maybe a speciality, or really good project management, really good communications, a special expertise or experience, a personality, experience with a certain type of client.. really anything.. But, there must be some thing that makes your company 'special' otherwise you will be lost in the mix. Don't worry about things like rates, or the fact that you have 'great' developers. Those are generic. Think about why a client would really choose you, and try to build on that! After you understand your company identity, it gets much easier to identify and engage marketing channels because you understand your target.DH
-
What should my consulting rates be as a freelance developer who can also do SEO, social media optimization and other marketing services?
Pricing for different tasks that require the same amount of time from you tells the Customer (and your subconscious) that you're working at a 5 on task x, but working at a 9 on task y simply because it costs/earns more. That seems to be a disconnect. Your time is your most precious asset, and I would charge for it whatever you're doing. If you build a site, and they are happy with your dev fee, but feel like you should charge less for SEO, simply let them find another SEO guy. That's their choice, but YOU are worth $xx.xx, no matter what you're doing. Also, in general, take whatever you're charging and add 10% to it. If you're still busy, add another 10%. Let the demand level determine how much work you do, and at what cost.SL
-
What would be a good answer for describing the size of your company to a potential prospect who might consider you too small to service their account?
What an awesome question! Businesses are running into this issue more frequently that ever, good news is, it can be done. Having worked on projects with oDesk, Fox Television and Wikipedia and having a very very small staff, it's certainly possible. Here's how I say it in our pitches to larger organizations: "Tractive West provides tailored video production services to organizations of all sizes. We have developed a distributed workflow using the latest digital tools. We leverage our small creative and management team with a world wide network of creative professionals, that means we can rapidly scale to meet the demands of any project while keeping our infrastructure and overhead lightweight and sustainable." Cheers and best of luck.SM
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.