Forum Moderators: LifeinAsia
I have a Q, and I hope while sening RFQs making a rough ROI calculation, or the client's investment-benefits chart may help one design company to secure the work.
Is it possible to make a ROI focus for the cost any client is going to invest.This should help the client to have a realistic plan and go further.
A client recently wanted to build nd ecommerce website without CC processing, I am such this client would need such a ROI predication.
What are all the practical ways to calculate this? Can somone share their experience and views.
Thanks in advance,
Benny
I think it's impossible to accurately predict what ROI you'll get from an eCommerce website. In fact, I think it's dangerous for you to suggest to the client what ROI he might expect. If sales don't meet your "prediction," the client will naturally blame you.
Most people consider ROI to be money, and in the case of an eCommerce site, that's probably correct. But there's also what's known as "true ROI" (what the client really wants). And that may not necessarily be money. I know someone whose client's ROI was to get home in time for his son's ballgames. He says he got the job because he was the only one who put that in the proposal.
I believe ROI is different for every client. And as such, it's not something that you demonstrate, it's something you discover. By engaging the client in dialog, you'll discover exactly what that is, for that particular client. Otherwise, you're touting an ROI that the client may not even care about.
Here's an example. Suppose you approach a real estate agent with the "ROI" that a website will help him sell more houses. But suppose that the agent doesn't really want to sell more houses. What he really wants is more time, to be able to get his broker's license. To him, selling more houses would take more time, and move him further from what he wants, not closer.
Discovering ROI puts you in the position to demonstrate to your client how you can help achieve what he really wants, not what you think he wants. Now you can show him how a website can save him the time he needs. Get the picture?
Now, in the case of a monetary ROI, it's the same principle: ask the client what ROI he wants. An eCommerce client may tell you that he hopes to sell 5 items a day. What does that represent in sales? Then project that over the course of 12 months and compare that to the development cost to determine how quickly he can recoup that cost. Then ask him if he's willing to risk $X,000 for the potential to earn $XX,000.
