Calculate your Return on Investment

Last week we introduced the 2 for $2 Holiday Card Program that lets you order samples to send with your customers. We also gave you a sample marketing program to increase sales with your client base. Today, I thought I’d show you how to calculate the Return On Investment (ROI) you can see with a little marketing. I’ve put together a couple of samples and then linked to an Excel File so you can change the numbers to fit your program.

 Let’s look at my first example:

In this program I’m including all of the following costs:

-  Purchase 8 Holiday Card Designs (I used the Bundle IT Program so I got 8 cards for the price of 6 or a total of $149.94. -  Then, you’ll need to customize cards to make your samples. In this example I created 50 Sample Cards at the cost of $2 each or $100. -  Then, once I get the samples in, I’ll need to send them from my studio. At $0.44 each, that’s another $22. -  Finally time is not free! I calculate by time at $75/hour and estimated 10 hours.

You can adjust all of these numbers to fit your plans, but this give you an idea. In my example, this program is going to cost me approximately $1,021.94 – and as you can see (below) the biggest cost is my time! If I’m just getting started and I don’t factor in my time, this campaign is only going to cost $271.94.  

Example 1
Task	Qty	Cost/Per	Total Cost
Buy 8 Holiday Card Designs	6	$24.99	$149.94
Make customize designs for 50 customers	50	$2.00	$100.00
Mail 50 Sample Cards	50	$0.44	$22.00
Time	10	$75.00	$750.00
Total Cost of Program			$1,021.94

Now, we are going to continue with the same example and see what the returns could be on this campaign. Again, you can customize these numbers to fit your needs, but here’s what I calculated:

-  From the 50 cards mailed, I think I can schedule 15 new sessions. Based on experience, I know my average return is about $1,000. So, that’s $15,000. -  I think another 15 customers will order holiday cards. I’m assuming they each order 100 holiday cards and I charge $3 each. I'm also assuming my cost to print those 100 cards is $1.20 each or $120.

Task	Qty	Income/per	Total Income
New Photo Sessions Booked	15	$1,000.00	$15,000.00
Sell 100 Holiday Cards (@$3 each, minus $1.20 for printing)	15	$180.00	$2,700.00
Gross Income from Sales			$17,700.00

  Now, to get our return on investment we just subtract the cost from our gross Income. On this program, here’s how it looks!

Return on Investment

$16,678.06

  Looks like a pretty good deal in this scenario, but insert your own numbers to see what this program could look like in your studio. Just download the attached Excel File and enter your own numbers! Let us know how you think this program will pay off for you! Leave us a comment!