Believe it or not. there are some people that won’t benefit from getting a video.
When you read this article, you’ll know if that is you or not.
There are a lot of great, non-money reasons people get an explainer video:
- To look “big league”
- To support a trade show.
- As a slide deck for investors/to get the next funding round.
- To help existing customers understand the product
- To have content for affiliate networks
- To introduce new products to existing customers
- To convert traffic to “leads”
- To be a signal of product quality.
These all can be smart, but mature businesses generally want to make sure that that there is ROI somewhere. At some point, every dollar spent has to be employed to bring in more money and to grow as much as you are able.
If that’s the goal, it all comes down to 3 things: your price, traffic and conversion increase.
We like our customers to be more profitable within 3-6 months of ordering from us, and we direct them to this page to figure it out ahead of time. When our customers succeed, we get referrals and more customers.
Conversion Increase x Traffic = Extra Profit
If your vendor isn’t going to share numbers with you, can them today.
If they don’t know them they aren’t doing videos that will convert.
If they won’t get share they are afraid of the truth – or they are lazy. We get it. A few of our competitors play games.
We reduce the price by $1,000 if you commit to sharing analytics data with us. (Get a quote).
If you don’t know how to calculate your conversions, use a service like Clicky
Here’s generally what to expect (your milage will vary, and you can do things to screw it up. If your product is bad, we won’t help you).
- A carefully done Simplifilm increases cold traffic (PPC) opt-ins by about 30%. This means that if you were at a 5% opt in rate, you’ll generally increase from to 5 to 6.5%. (.30 * 5 = 1.5).
- A Simplifilm increases opt ins for warm traffic that is familiar with your site by about 20-25%.
- A Simplifilm increases sales 20-35% when is a free or no risk trial.
- An Simplifilm increases sales by 35-50% if there is no “free trial”. (but generally percentages are lower)
- A Simplifilm increases apointment request (for b2b or consultative sales) by about 60%…if the landing page follows conventions of best practice
This has borne out across many industries in a variety of situations. We don’t always get access to numbers that our clients have, but this is derived by averaging out the numbers that we do have access to. (Hint: we want numbers so badly, that we discount your price $1,000 if you share analytics data with us).
A note: we study conversion. Others specialize in other things. We make narratives that convert and this has been the assumptions when we replace slide decks or other competitor’s videos.
Remember: Your milage varies. Having a bad landing page and a beautiful video won’t do you any good.
[Updated January 14, 2012, 10:46 AM - we will update this fairly regularly as our numbers change].
Most of our clients sell software where there is next to no incremental increase in pricing to go along with the incremental increase in profits- but you’ll want to factor in cost of sale or profit.
Hypothetical Example: How To Calculate Payback Time For a Video
So let’s say that you’ve got software for sale for $40 bucks on average. Just for the sake of round numbers, let’s say that you’re getting 10,000 visitors a month and converting 5% of them into new paying customers.
That’s 500 customers. * $40 bucks. $20,000 in monthly sales.
That’s our baseline. You can use your numbers to get the gist of what’s happening next. Be sure that you get some understanding of your warm and cold traffic, and where it’s converting from.
Let’s say we have a free trial, and we can use the low end of the scale for this: 20%.
So, if traffic stays the same, we’ll get 600 customers. (120% of 500). Our revenue increase is $4,000. (These are fictional, made up numbers. See our Case Study for more details.)
Let’s say we made the Simplifilm with multiple endings, so we’re at $12,000. This means that we’re in the range of 3 months to pay back for the increase in sales. This seems like a good decision to go forward.
So here’s a quick guide. Make the calculations. Then see below.
Payback Time 0-6 Months.
Go. Move forward with the movie.
Get a quote and make sure you get first quality work.
If this is you – start the process by getting a quote.
Payback 6-12 months
Proceed cautiously. If you’re wrong on your assumptions, you don’t have a margin for error.
If there are other factors (I.e. using it to pitch investors) it might be worth doing.
Payback 12+ months
Changes are needed before you can do a Simplifilm.
Either there is too little traffic, or the pricing is wrong.
In any case, we’re here to help. We want to tell you if the ROI for your video is in line, makes sense or needs to be modified. Let me know if we can be of assistance in any way. We make videos that simply convert. We know the tricks. They translate across industries. Get a quote. We’ll tell the truth about what works, what doesn’t work and where to go from there.
