The Easiest Way to Calculate ROI

One of my go-to techniques in teaching freelancers and agency owners how to make more money is value pricing.

That’s just a fancy way of saying that you expect compensation for the change you’ll deliver, as opposed to charging for other things like time, deliverables, materials, etc.

The most common question—and, sometimes, objection—I get about pricing this way is this:

But how do you calculate the ROI (return on investment)?

I’ll share the fancy math in a future post, but there’s an easier way anyway:

Calculate it after the project is over.

Trying to calculate it before is a prediction. You’re not a fortune teller.

But wait… how can you price a project if you calculate it after?

You calculate the ROI of the previous project.

And you use the ROI of the previous project to sell the next one.

The script looks something like this:

Prospect: “$50K for brand identity sounds expensive. Why would that be worth it for us?”

You: “For my last 3 clients, they each saw anywhere from a $100K–$300K increase in revenue through new customer signups after the new brand identity launched. Based on what we’ve talked about so far, I suspect my work could have a similar effect for you. All three founders directly attributed growth that to my work. Happy to introduce you to them if you’d like.”

In short, don’t try to predict the future.

Instead, describe the past.

Then convince your prospects that your past could be their future.

—Dan