Are you a broker and have always tried to find out what is the ideal amount to pay for the web service? Perhaps you still haven’t found the answer, because it’s impossible to categorically determine the price of a job like this. After all, this will depend on different factors and, mainly, on your business objective.
To estimate how much is worth investing in a web service, it is important to know how to calculate the ROI (Return on Investment) of each stock. For example, you can measure ROI in different areas such as real estate portals or web videos.
Want to understand this better? So, follow today’s post and find out what is the ideal amount to pay for the web service.
Why hire web service?
Everyone agrees that the internet is changing the way people do business. And, of course, the real estate sector was not left out of this. With digital marketing, a broker can measure and evaluate the result of their work, such as the number of visitors to a website and their consumption behavior.
The possibility of monitoring the performance of an action is precisely one of the advantages of online in relation to traditional marketing. From the analysis of data collected on the web, professionals in the field extract insights that can help them make smarter decisions. In an increasingly connected world, it doesn’t make sense to give up this kind of information, does it?
What is ROI?
The acronym ROI stands for Return on Investment. In other words, it is through this metric that you are able to know how much money you are making or losing on each stock. While this type of calculation has been used by traditional marketing for a long time, it has been more prominent in online because of the ease of tracking the data.
ROI can be calculated based on the equation below:
ROI = (investment profit – investment cost) / investment cost
for example, if you invested R$10k and earned R$30,000, your return on investment was 2 times the initial value.
ROI = (30.000 – 10.000)/ 10.000
ROI = 2
If you want to calculate the number as a percentage, just multiply it by 100. It is worth remembering, however, that profit is not the total gain in sales. It’s the profit margin on each sale, right?
How to calculate it?
ROI of real estate portals
To know the ROI of real estate portals, it is necessary to pay attention to some indicators such as:
- number of potential customers from each real estate portal;
- number of sales made from each ad;
- Required amount of potential customers to generate a sale.
It is essential to write down these numbers for a few months so that the information corresponds to reality. Don’t forget to take the average value into account, as some periods may exhibit unusual behavior.
From this information, you are able to know how much it costs to generate 01 potential customer in a real estate portal and, thus, plan your investment in ads more efficiently.
ROI of web videos
As each customer behaves differently when watching a video, the tip is to use the Lifetime Value (LTV) to estimate its value in the medium and long term. To do this, use the following formula:
LTV = average ticket of orders x average retention time x average amount of purchases per user
Another good suggestion is to calculate the ROI of each movie in the campaign separately, so that you know which one had the best yield.
Use the equation below to calculate the ROI of videos:
ROI = (value of sales achieved with the media – investment in media) / investment in media x LTV
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