ROI calculator: Hack customer objections by revealing the added value of your product or service
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Opportunities and objections – two opposite factors that have a huge impact on the customer journey through the sales funnel. Opportunities pull users forward like a magnet, while objections, often backed up by past frustrations, hold users back, stalling them within the sales funnel.
While in the Awareness Stage the balance is typically tipped to the side of opportunities, during the Considerations Stage and later, the balance between the two poles becomes quite tight.
In this post, I’ll explore different ways of keeping the balance on the side of opportunity with the help of interactive Return on Investment (ROI) calculators. It might be the best tool in overcoming the most common objection – it’s too expensive.
Here’s what we’ll cover:
- What is ROI?
- Boom! 15900% Return on Investment!
- What is value added for me?
- Amplification
- Personalization and emotions
- Unit convert or result transformation
The story began when I started creating an ROI calculator test for a landing page. I had an assumption to test:
“Showing personalized value added (ROI) should increase both visitor to lead and lead to customer conversion rates.”
So, I joined one of marketing’s ongoing battles to tilt the balance toward the opportunity side.
Since then, I’ve been thinking about the following flow:
PPC > Landing page with bold heading + Variant A: Nice illustration || Variant B: ROI calculator > Register to free plan > Subscribe to one of our premium plans.
But this story isn't all about conversion rates or whether A or B won the competition. (B ) I want to share the things I faced while building the ROI calculator.
So, let's start with a short explanation of ROI, or a little refresher if you’re already familiar with it.
What is ROI?
Investopedia: Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.
The ROI Formula
The simplest ROI formula is: ROI = Return – Investment / Investment * 100
Return on Investment Rate
Financial ROI (the father of ROI calculators) defines the growth percentage rate of investments. For instance, investing $100 and getting $200 back is equal to (200-100)/100*100 = 100%. And this is fair; a percentage rate is a value that can be compared. It’s clear that 200% is greater than 50%, but in terms of percentages you can’t say that $200 revenue from a $100 investment is more than $50 from $5.
My Custom ROI Formula
My initial idea was to show what ROI rate you can expect by investing as little as $15 into an Interactive Calculator. This is how much the most popular CALCONIC_ plan costs per month.
A solid basis for this is general stats: they reveal that Interactive Calculators increase Visitor to Lead conversion rates by 10 to 40%, and Lead to Customer conversion rates by up to 20%. This may vary by industry and your current level of conversion rates. For my ROI calculator, I picked something in middle. Visitor to Lead +20% and Lead to Customer +10%.
I decided to use the same formula illustrated before; the only one difference is how I’m defining return. Basically, it’s equal to the projected return gain affected by increased conversion rates, minus current return.
ROI = (Potential Return – Current Return – Investment) / Investment * 100.
Where:
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Potential return = Visitors * Visitor to Lead rate/100 * 1.2 * Lead to Sale rate/100 * 1.1 * Profit per Order - Visitors * Visitor to Lead rate/100 * Lead to Sale rate/100 * Profit per Order
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Investment = money spent for Interactive calculator = $15
By this point, I was determined to expose my ROI calculator result as a percentage rate. After spending 10 minutes building my financial calculator, I got the first ROI calculations…
Boom! 15900% Return on Investment!
Wow, looks like this is an awesome tool with an unbelievable Return on Investment. After spending some time playing with different numbers – mostly trying to decrease all initial values – I was still struggling to get to the “dozens” level of return rates.
And yeah, the answer is quite simple – it only requires a minimal investment. Plus, if it helps close a couple of extra sales, then it exceeds your investment with a big bonus.
I even thought of a few draft ideas for a bold heading: “Hit your best ROI record ever with a $15 monthly investment.” Or “Some tools are born to hit ROI records!”
This definitely looks like a solid opportunity that should push customers to act.
But…
There was something that wasn’t doing it for me; I was excited but not satisfied.
What is value added for me?
Logic says: It’s clear; there is added value here. But consider a normal customer who, despite the high percentage rate, still can’t entirely understand what it is. It’s kind of like seeing the North Star – it leads you in a particular direction but you have no idea what you’re going to find once you get there. At this point, I started to doubt the form of how to show results. And is an ROI rate such a solid argument in support of "going forward" with something anyway?
So, what will an Interactive Calculator embedded into my website bring me exactly? Or what will I get for the $15 monthly fee?
The first thing that comes to my mind is this: if I spent X dollars, I should get X+ in return. Good, after my calc modification it shows: 20 extra leads, which will convert to 3 extra sales and earn me an extra $150. Hmm, this is something pretty crystal clear, and tangible to the extent that I can almost touch it.
I would say this is great primary value, but in some cases this might still not be enough to push a user forward in the sales funnel. After few test calculations on marginal areas, I found that earning in dollars ($) might look relatively small.
Amplification
As a person I’m curious, but as a professional I value my time. I mean, there has to be a minimum amount of money involved to get me off my chair. But as my grandfather always says: there is no coin too small coin, just too little time to collect it :)
Yeah, I got it! $1,800 looks much more motivating, and it also happens to be equal to how much our $150 monthly return gives us over a one-year period ($150 * 12 months). I decided that for cases when calculating monthly earnings is lower than $1,000, it’s much more appealing to transform the timeframe to earnings per year. It’s easy to do with the conditional element visibility feature, and Voilà. You can check this on my ROI calculator, just set the net gain to $5.
I was so excited and wanted to take it a step further, so I put my creativity into overdrive . What else can impact a visitor’s decision to take the next step, in my case – sign up and try our calculator builder?
Compliments! They pull people’s heartstrings. I’ve been managing a team for more than a decade now and from experience, I know positive words (and praise) about achievements or new initiatives (even ones that are clearly not the best) have a lot of power. They encourage productivity and ultimately challenge people to outperform. Can I somehow include this kind of feature to my calculator?
Of course I can ☻
Personalization and emotions
I added an extra component to my calculator that will show 1 of 5 messages based on Visitor to Lead and Lead to Sale input scores. The concept is to grade expertise and show different predefined encouraging messages to each segment.
Now, if you set the Visitor to Lead rate above 60% and the Lead to Sale rate to more than 20%, my calculator will show to you: WOW! Oh SenSei, let me become your student so I can learn your amazing LeadGen techniques!
This tactic also helps in avoiding tricky situations – overestimating ROI potential. CRO guys say there is always something to optimize, but everyone agrees that this is much harder when it comes to increasing conversion rates that are already high. I mean, for my initial ROI formula I used a median of increase equal to 20% to make it realistic. But if a user sets their current conversion rate to +50%, my promise to increase their conversion by 20% becomes too optimistic.
It’s possible to write a more complex formula where growth adjusts on initial values, but this isn't necessarily the goal of this calculation. Another thing, I believe that folks who have high conversion rates also have significant expertize in CRO, and with our tool they might achieve even better results than I can dream. To finish with this, I just wanted to add an extra note pointing out that calculations based on high conversion rates might be too ambitious.
I think the concept of personalized messages should be quite clear and I won't expand on this topic any more. I added different messages for other grades of expertise, too.
However, maybe I need to remind you that fear plays a huge role in emotional buying, too. People are scared of losing out on good opportunities or performing worse than others. But this is a personal choice of communication style. I'm going with positive :) There is only one challenge - what do you say to those with sh.. results?
And this brings me to my next point.
Unit convert or result transformation
So, if the calculated results are sh..? For those whose main results calculated are low – my calculator will tell them naked truth. I’ll soften the message with humor and use what I like to call the “unit convert” method.
Simply speaking, if earnings are too small even after multiplying to calculate long-term returns, it’s time to seek alternatives. ROI calculator can also be caled a savings calculator. After all sometimes it's not only about earning more, but optimizing the expenses. Also simply help in understanding how much you can save. Here's another example: a monthly earning of $70 could be converted to a free cup of coffee daily And I expect that my message will have a positive impact:
“To be honest, your current results are far away from making you a billionaire :( But there’s some good news! You’ll make enough to fund at least 20 coffee breaks, and hopefully those breaks will inspire you to come up with a few amazing ideas about how to use calculators to grow your business.”
After reviewing my calculator with colleagues, I came back with a great list of additional ideas, like changing the Call to Action endpoint for different results calculated, estimating sales time saved, or showing how little is required to onboard an ROI calculator, which might hack one of the most common concerns. I decided to leave those ideas for future tests.
I think my current ROI calculator is fully-equipped and ready to take the stage!
Summary
To conclude, a Return on Investment calculator is a powerful tool, and by default a calculated rate measured in percentage is a very universal and comparative value. But in many cases, it might be a bit too abstract, and it can’t increase the ratio of customer objections vs. opportunities to proceed down the sales funnel in a positive direction.
You can create a real interactive ROI calculator using a few techniques, which will help push users forward through the sales funnel.
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When you can’t rely on a calculated ROI rate as value added, opt to put forward an alternative. This might increase your chances of pushing customer conversions. Earnings, leads, orders, etc.
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Accumulate low results by showing yearly earnings instead of potential earnings per month.
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Get personal: encourage users, grade them and show personal messages depending on their score.
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Speak to customer emotions with jokes or even fear to make them happy, scared. Emotions make us move.
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Use my “unit convert” technique to address even the lowest value added results.
Don’t show all possible values at once for each customer; it might overwhelm them. Sometimes after showing your commission or pricing you need just one more push to convince your visitor to convert.The magic is that each value added might be shown depending on the data added or results calculated. And remember, you’re the king – you set these rules!
Now it’s your turn. Let's hack the balance of opportunities and objections with a breeze of creativity. There are endless possibilities and what's best, it doesn’t hurt your bank account, as the ROI calculator shows. All it requires is sharp mind, so make sure you don’t start building your calculator after a couple pints of beer. That time is better used for brainstorming :D
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p.s. Create your ROI calculator with our platform to make the process simple and enjoyable. We have a free plan, too, so give it a try.
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