Q

Do ROI calculators have proven value for direct marketing campaigns?

CRM ROI expert Tom Pisello explains how companies are seeing direct marketing benefits.

We've been hearing about "ROI calculators" from other companies, but do these really work? Can you explain what they are and how they work?

Also, what vendors are using these calculators, and how are vendors using them to help customers be more effective

in gleaning ROI?

ROI calculators are typically used on vendor Web sites 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 acting as a 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 Alinean surveyed many vendors with these calculators. For example, a major software vendor achieved the following with an ROI calculator:

> Resulted in a 15% visit-to-sale conversion rate (versus 5% for regular registrants).
> Produced two times as many qualified leads as all other Web promotions combined.
> Increased the length-of-stay by 340% (17 minutes vs. five minutes for regular visitors).
> Increased average page views by 314% (22 per visit vs. only seven for regular visitors).

What are the keys to the program working for the vendor?

> Adding third-party credibility by having the tool developed by someone other than the vendor.
> Including white paper case study content from existing customer results to back up all of the benefit claims.
> Adding user capability -- to review and change all key assumptions so they were comfortable with the ROI results (no black-box).
> Having this program featured as part of an overall value-oriented campaign – attracting the right audience who care about ROI and business value.
> Being simple to use up-front in order to get results in a few minutes or less, but having some depth so that users can fine-tune results to match their own unique opportunity.
> Including 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 Alinean has developed for various leading IT solution providers.

This was first published in June 2006

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