Question
Topic: Research/Metrics
How To Value A Service, & Where To Get Numbers?
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Not having done this before, I have two questions.
1) Hypothetically, lets say that the new service will produce 100 new leads for the client, valued at $10 each. As an alternative, the client could do the work in-house, which will cost them 5 hours of labor at $40 per hour, and $75 in postal costs.
What is the "value"? Is it $1,000 (the leads our service delivers)? Or is it $1,275 (the leads plus the in-house costs we saved them?
2) Second question: do you every feel a bit silly assigning dollar values to things? Here is an example I saw on another site: an article "planted" in a magazine with 50,000 readers was valued at $5,000 for having "increased the CEO's position as an Known Opinion Leader". How would a value like that be determined: did they really say to themselves "hmm, I'm sure everyone read it, and it had an average impact of $0.1 per person"? Or, for things like this, do we go back to "seat-of-the-pants" methods?
As an indication of just how unfamiliar I am in this new territory: I felt about odd saying that each lead was worth $10 in my example above - even though it was hypothetical! Our clients sell big ticket items with very long sales cycles. Most leads never pan out, those that do are worth millions - in a few years time. How can one possibly value them?