javoReturn on investment
How many leads does it take to pay back a €600 chat agent?
A simple formula for the break-even point of a chat agent, with worked examples based on what a client is worth to you and how many leads you convert.
Before installing any tool on your site, one question is enough: how many extra leads does it need to pay for itself? The answer is a single division.
The formula
Leads needed = cost ÷ (margin per client × conversion rate)
The margin per client is what a new client brings you once direct costs are deducted. The conversion rate is the share of leads that become clients. Multiplied together, they give the average value of a lead.
Examples for €600
| Margin per client | Conversion rate | Leads needed |
|---|---|---|
| €300 | 20% | 10 |
| €500 | 25% | 5 |
| €1,000 | 25% | 3 |
| €2,000 | 10% | 3 |
| €5,000 | 10% | 2 |
Each row rounds up to the next whole lead: you cannot sign 2.4 clients.
Count only additional leads
The classic trap is to credit the tool with every lead that passes through it. A visitor who would have phoned the next day anyway is not a lead gained. For a cautious estimate, count mainly the enquiries that arrive out of hours, or from visitors who left no other trace.
How to estimate it before you start
- Take the average margin of your recent clients.
- Work out your conversion rate on enquiries received by form or phone.
- Check how many visits your site gets out of hours: that is the pool in which a chat agent can find additional leads.
If the break-even point comes out at a few leads a year, the risk is low. If it is higher than the number of enquiries you receive today, measure first before you invest.
Sources
Javo answers your visitors, even out of hours.
Installed on your site with one line of code, from €600 per product.