Opportunity Cost: The better way than ROI
You're standing at a crossroad, unsure where to go next.
You can go left, right, or straight, but in all directions you can't see where they lead.
You guess left...
It ends up being the wrong way. Now what did it cost you going the wrong way?
1️⃣ 🤔 The time spent hesitating and trying to decide which way to go.
2️⃣ 🛑 The time spent going left and finding out it was wrong.
3️⃣ ↪️ The time it takes to turn around and back track to the crossroad.
4️⃣ 🕣 The time figuring out the next direction to take.
5️⃣ 🏃🏽♂️The progress lost you could have been making in the correct direction had you guessed it.
⚖️ Most people only think about 1+2, without realizing 3+4+5 are the sunk opportunity costs of a bad decision or missed opportunity.
And that's why most ROI calculators suck. They promise what you stand to gain by making the right decision instead of what you clearly stand to lose if you make the wrong decision.
What if, instead of trying to convince people to buy your product under the promise of saving time and money, you explained to them what it's costs to make the wrong move or do nothing at all?
What if you focused on opportunity cost instead of ROI?
That would be real world application of Prospect Theory, which states the fear of loss is twice as compelling as the possibility of gain.