Part One of ROI: Savings in Operational Costs
The first and most tangible part of the Return on Investment is the elimination of the huge expenses that printed catalog production imposes on the business.
A) Complete Elimination of Printing and Distribution Costs
- Production Costs: Calculate the annual amount spent on design, pre-press, printing (considering paper type and binding), and reprinting new editions. This cost is now zero.
- Shipping and Distribution Costs: Tally the costs of postage, courier services, or freight for shipping physical catalogs to dealers, branches, and final customers. In the digital method, distribution cost is summarized to a simple link or email.
B) Savings in Maintenance and Content Error Costs
An outdated printed catalog immediately turned into waste and lost costs as soon as prices or inventory changed.
- Waste Costs: Calculate what percentage of printed catalogs were turned into waste due to outdated information, printing errors, or instantaneous product changes.
- Warehousing Costs: Eliminate the need for physical space to store hundreds of printed catalog volumes.
Part Two of ROI: Revenue Increase and Sales Optimization
The more important part of ROI is the additional revenue and increased productivity that the smart catalog generates, directly and indirectly.
A) Increase in Conversion Rate
- Smart catalogs increase the conversion rate of visitors into buyers or leads through tools like direct CTA buttons to the shopping cart or Lead Forms
- Formula: Calculate (Number of purchases made via the catalog / Total number of catalog visitors) and compare this number with the conversion rate of product pages on your website. Any increase in this rate directly translates into additional revenue for you
B) Reduction in Cost Per Acquisition (CPA)
- Due to better SEO performance (Article 11) and stronger Retargeting, the smart catalog attracts higher-quality, more organic leads.
- CPA Calculation: If the CPA via the smart catalog (which has low or zero advertising costs) is lower than the CPA resulting from paid advertising, the difference between these two amounts is your direct profit.
C) Improvement in Customer Experience and Lifetime Value (LTV)
- An interactive and up-to-date User Experience (UX) leads to greater customer satisfaction and loyalty. Loyal customers spend more money over time (increasing LTV).
- Metric: Compare the lifetime of customers who use the digital catalog with traditional customers.
ROI Summary: Simple Calculation Framework
For presenting a clear and understandable management report, you can use a simple framework:
(Net Profit / Cost of Investment ) × 100
Or, in other words:
((Final Value of Investment−Initial Cost) / Initial Cost) × 100
- Total Costs: Includes the annual subscription cost for the digital publishing platform and the designer's fee for content preparation.
- Total Gains: Includes (Savings in printing and distribution) + (Monetary value of new leads) + (Monetary value of increased conversion rate).
By calculating this metric, you will have a precise percentage number that shows how much profit you have earned for every 100,000 Tomans you invested in the smart catalog.
Final Words
The smart catalog is not just a "stylish option"; it is a strategic investment. By eliminating old costs and increasing revenue through sales process optimization, this tool has a clear and high Return on Investment. By collecting behavioral data (Analytics), you can convert all assumptions into facts and figures and ultimately prove the financial value of the e-publication as a main driving force for sales growth.
