What “ROI” Looks Like…

I recently posted about how I made a few tweaks to a friend’s eComm page that increased their conversions by over 150%…📈

And how there’s a big opportunity for Direct Response Marketers to work with eComm business owners…

Helping them to increase conversions, AOV, etc.

What “ROI” Looks Like…I got several responses to the post, which was great…🗨

And one of them came from someone who mentioned how he’s been wanting to work with more eComm clients…

But that he has trouble knowing how much ROI (return on investment) those clients will get from working with him…

And this has stopped him from reaching out.

So his question was…👇

“How do you know how much of an ROI your optimizations will bring the client?”

 

The answer goes back to something I’ve mentioned many times before…

YOU NEED DATA.

As the service provider, you need to know the following things at a minimum:

  1. How many sales per day is the client doing on average right now.
  2. What their average conversion rate is.
  3. And what their average order value is.

Because once you know that stuff…

It’s easy to understand what kind of an ROI your optimizations can have for the client.

For example:

What “ROI” Looks Like…Let’s say the client’s current conversion rate is 1%…

Their average order value is around $100…

And they’re doing about 150 front-end sales per day (i.e., they are getting 150 new customers daily).

This means that right now, they’re doing roughly $15,000 in sales per day…

Or $450,000 per month.

Well, if you’re able to increase conversions by 150% (like I was for the client I wrote about)…

What happens to those numbers?

Instead of 150 front-end sales per day…

They’re now doing 375 front ends per day.

Assuming the AOV stays the same here…

That means their revenue is now $37,500 per day or $1,125,000 per month.

That’s a massive lift, right?

And when you can hit a home run for a client like this one…

It’s easy for a client to give you a big fat performance bonus.

But of course, here’s the caveat:

What “ROI” Looks Like…The client has to be doing a decent amount of sales already for them to be interested in such a performance structure.

In other words, if they’re doing 10 sales per day on a product with a $50 AOV…

And you get them to 25 sales per day…

They’ll be happy of course…

But it’s unlikely they’re going to have the money to pay you some big fat bonus.

That’s why I’m super selective with the types of clients I work with…

And for those who are earlier on in their career, or just starting out…

You’re probably better off just charging a flat fee for your conversion optimization stuff…

Like $1k or $2k…

Unless you happen to land a whale client.

 

– SPG

P.S. This post originally came from an email I sent to my private list. If you want to see more stuff like this from me, you can apply to join my list using this link

 

0 Comments

© 2020 SPG Educational Resources LLC

Stefan Georgi

Pin It on Pinterest

Want to peek inside the mind of one of the world’s most successful copywriters?


My private email list is where I spill all of my secrets. The tricks and tactics that allow me to create winning sales copy time-and-time-again.

The lessons I've learned while building numerous multi-million-dollar companies. The mindset hacks that allow me to perform at an ultra-high-level day-after-day.

APPLY TO JOIN MY EMAIL LIST NOW