Estimate the Payback Period for your Video
With the name “Clips That Sell Pty Ltd”, it pretty important to prove our marketing videos do improve sales. In this article I’ll show you how you might value the benefits versus the costs of having a professional marketing video made.
A back-of-envelope business case needs to compare your video project against an alternative, or some kind of control. Let’s compare a website landing page with only a video, versus a landing page consisting of a well refined sales letter, no video.
The Benefits – Carl’s Exercise Program Landing-Page Results.
Luckily, we have such an A/B split test already prepared here. Carl compared his well refined long form sales letter for his exercise program, on a web landing page, with another using a professional embedded, one minute,video. The video demonstrated his exercise program and had a call-to-action to the go to the next stage in his sales funnel.
The page with the video converted 46% more visitors. 38 out of 134 visitors went on to the next stage in the sales funnel versus 26/134 for the control sales letter.
This study is one of the more conservative estimates. In this study, online fashion retailers got a 134% average improvement in conversion rate with video. Of course it depends what you’re selling and how. I have also seen the figure 64% improvement in conversion rate for ecommerce businesses.
On the other hand, making a professional video is more expensive. Let’s say you spend $300 on a professional sales letter (even if it’s your own time), versus say $1,200 on a typical professional video.
Payback – Some Maths
Your payback period will be the time it takes to make the $900 difference from the video, compared to the sales letter.
Let’s use Carl’s conservative 46% conversion rate improvement. But wait, that was just for one step in the sales funnel. Lets imagine its a five step funnel and the video contributes around a 10% overall improvement converting inquiries to sales.
At this conservative 10% improvement, a product that makes $100,000 per year, pays for the video in about one month.
How long does it take you to make the 10+% improvement in conversions to equal $900? Everything extra after that time is profit. You don’t need a discount cash flow analysis for this one.
How do videos increase conversion rates?
Advertisers have long sought to gain our attention. It’s the necessary step before desire and purchase.
- faces and facial expression
- body language
- a story.
These are things we humans are psychologically programmed to attend to.
Clicking to watch a video is one small extra step to a commitment. A commitment to spend time learning. Prospects are inquisitive to see what the video has to say, but being confronted with lots of reading seems less appealing. We skip to the bottom line. So videos increase time spent on your landing page.
Videos build more trust. We can see and hear how much you mean it. Even better, get a past customer to give a testimonial. Much more convincing than a written testimonial.
Videos Are For More Than Landing Pages: Tow Case Studies
Many of Clips-That-Sell clients have referral based businesses and use the videos for much more than their website. Action Victoria are using these 21 testimonial videos by Clips That Sell, as part of group presentations or in meetings. It’s a lot easier than a site visit to show how well you do what you do.
Here’s another example. Imagine you’re an electrical contractor looking for ways to recruit large industrial or commercial clients:
At Clips That Sell, we ensure your video reflects ‘what’s-in-it-for-your-clients’. That’s how we know our video clips will achieve your objectives.
Estimate how you could improve your conversion rates with videos, give me a call and I’ll provide concept ideas and a quote, no obligation.
by Keith Rhodes, Clips That Sell