Wednesday, November 08, 2006

ROI Calculators - do they work and are they credible?

ROI Calculators are typically used on vendor websites to provide a tool where visiting prospects can quickly determine whether the vendor’s solutions can provide quantifiable value. Typically the calculators have a few questions in order to get an idea about the prospects business and opportunities from improvement. Using direct research results or estimates, the tools can simulate the impact of the solutions and quantify the potential benefits, costs and ROI (ROI = net benefits / costs).

For users of these calculators, they can provide a quick idea as to what savings could be achieved, particularly those calculators which let the user delve deeper and change all assumptions and defaults (not black box with magic results that always come out positive), and those which are supported by direct research as to the benefits achieved by other customers.

These calculators have proven valuable as landing pages for direct marketing campaigns and for educating and capturing leads. The results are real, and quantifiable, as we surveyed many vendors with calculators, for example, a major software vendor achieved the following with an ROI calculator:

> Resulted in 15% visit-to-sale conversion rate (versus 5% for regular registrants)

> Produced 2 times as many qualified leads as all other web promotions combined

> Increased length of stay by 340% (17 minutes vs. 5 minutes for regular visitors)

> Increased average page views by 314% (22 per visit vs. only 7 for regular visitors)

The keys to the program working for the vendor?

> Third party credibility by having tool developed by someone other than vendor

> Including a white paper case study content from existing customer results to backup all of the benefit claims

> User capability to review and change all key assumptions so they were comfortable with the ROI results (no black-box)

> Featured as part of an overall value oriented campaign – attracting the right audience who care about ROI and business value.

> Simple use up-front in order to get results in a few minutes or less, but with some depth so that users can fine-tune results to match their own unique opportunity

> Reports so that the results could be shared with other stakeholders and decision makers

Visit http://www.alinean.com/P_ROIcalculator.asp for several sample calculators we have developed for various leading IT solution providers.

No comments: