How to calculate potential ROI
I was reading through a few posts here and one bit of advice I noticed that came up fairly often was around basing your fees around the potential ROI for the customer, and not just a fixed dollar amount.
I think that idea is fantastic, but how in the world do you go about doing it??
My thoughts are:
1. Identify what an average client is worth
example: say for a personal trainer, a typical client does 2 personal training sessions per week @ $40 per session for an average of 10 weeks. = $800 (($40 x 2) x 10). By the way I have no idea if this is true or not, just making stuff up as an example.
2. Identify some relevant local keywords and the search volume for each keyword.
example: lets say there are 3000 people per month searching for local keywords related to personal training
3. Estimate number of clicks.
This is where I get a little lost. Ive heard that if you are in the #1 position you can roughly get about 42% of the searches, which in our example would = 1,260
4. Estimate number of conversions for each click through to the website
Ive heard the average is about 1%. So if the business owner converted 1% of the 1,260 into paying clients, they would stand to profit $10,080 per month. ((1,260 * 1% = 12) x $800)
5. Use the number in step 4 to calculate fee.
I think dexx has a ratio of 1 to 4. so for every dollar we charge them, we can make them $4. So in the example above you could charge a few thousand fairly easily.
So thats my thoughts on how one might calculate it. At the end of the day is this right, or am I way off the track??
Also a thought I had is to use strategies such as auto responders, video marketing etc... to increase number of people to site, and site conversion rate.
Dust off your calculators and get those fingers working, I look forward to seeing an example of the math.
:-)
Earn up to £20 per phone call as a MyCallPartners.co.uk pay-per-call affiliate!
~ www.CashAppFreedom.com ~