How do I prove Return on Investment (ROI) for video production?
Showing decision makers you know how to prove ROI for your video project is often the key to securing the budget you need to get started. Watch our video and learn how to calculate return on investment for video production.
(video transcript) How do I prove ROI for video production?
Video Production ROI (return on investment) must be proven. As a small business, a professional practice, or even a one man band, we must make responsible decisions when investing in our business. The future of each business depends upon it. So when you consider investing in video production answer these questions first.
What’s the purpose of the video? What’s the video’s value to your viewer? What action do you want your viewer to take after watching your video? And here’s the big question. Does that action lead to a conversion that contributes to your return on investment?
These questions, well answered, are the roadmap to return on investment.
Let’s look at a couple examples. First let’s say you’re thinking about producing a product demo video.
What’s the purpose of this video? To demonstrate the features and benefits of the product and to show it in action. Interesting point to note here, our purpose for making the video often mirrors the value to the viewer. So, what’s the value? The viewer gets a guided tour of the features and benefits and gets to see the product in action. Sound familiar? Great, so your viewer finishes watching your video. What action do you want them to take next? Well the answer to this question is fairly straight forward. It has to do with design and implementation, -that is, where your viewer is watching this video, and providing the viewer with a clear and immediate opportunity to take action.
So, in the case of your product demo, the video should be placed on the product page. And the most prominent graphic element on the page must be the “add to cart” or “buy now” button. Now the viewer’s next click becomes your conversion. Congratulations, you’ve made another sale, but let’s not forget why we’re here.
ROI, return on investment. Now we simply calculate how many product sales are required to realize your ROI for the product demo video. And every sale after that is profit.
Fantastic, right? Except that many of you aren’t selling a product, you’re providing a service. No worries, the framework is the same. Let’s say you want to produce a brand video.
The purpose of the video, and the value to the viewer, is to show them who you are, what you do, and to connect with them in a way that shows why they should choose to do business with you.
The brand video should be placed on your homepage above the fold with the Contact Us or How Can We Help button prominently placed. With most service based businesses the viewers click on that button leads to your first consultation -and that is our conversion. So when we look at your Brand Video’s ROI, we need to go one step deeper. When a new lead first contacts you, we recommend asking them if they saw your video, and then document their responses. You should also ask yourself, on average how much is a new client worth to your business, what’s their value.
And again, we divide the cost of your new brand video by the new client’s value to determine how many new clients it will take for you to realize your ROI.
It doesn’t matter whether you’re selling a product or providing a service, whether you are a small business owner, or a company decision maker, in each of these scenarios, we’re all responsible for ROI because our livelihood depends upon it.
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