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Measure ROI

How we Measure Testing ROI

Last Updated: Nov 17, 2025, 12:00 AM

How We Project 12-Month Revenue: The Quarterly Decay Model

Here's where most CRO agencies get sloppy. They run a test, see it win, and tell you "this test will make you $120,000 a year" by just multiplying the monthly number by 12. That's wrong. Test results don't stay the same forever.

A few things happen after a winning test goes live:

Statistical regression to the mean: When you declare a winner, you often caught it at its statistical peak. As more data comes in, the effect gravitates back toward reality, which is usually lower than your initial measurement.
Market conditions change: Seasonality shifts, your traffic sources vary, competitors respond, and user behavior evolves. A test that crushed in January might perform differently in July.
Diminishing returns: The longer a change stays live, the less "novelty effect" it has (though research shows most of this is actually regression, not true novelty).

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Our 20% Quarterly Decay Model

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Instead of pretending test performance stays flat, we apply a 20% decay every quarter. This means each quarter, we reduce the expected revenue by 20%.

Here's a concrete example: A test generating $10,000 in extra monthly revenue

Q1 (Months 1-3): Full $10,000/month = $30,000
Q2 (Months 4-6): Decay 20% = $7,500/month = $24,000
Q3 (Months 7-9): Decay another 20% = $5,625/month = $19,200
Q4 (Months 10-12): Decay another 20% = $4,219/month = $15,360

Total 12-month projection: $88,560

This means a single $10,000 monthly win is worth about $88,560 over the year, not $120,000.

Why this matters: After 12 months, your test is still generating about 32% of its original value ($3,164 vs $10,000). It's not worthless. But it's also not maintaining full impact. This is why CRO is an ongoing program, not a one-time project. Each quarter, you need new wins to offset natural decay and keep pushing revenue up.

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Why We Don't Use Ranges

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Some agencies report ROI as ranges ("you'll make between $60K and $100K"). We don't. We give you absolute numbers because:

You deserve clarity: Ranges feel like hedging. Our model is based on real data and statistical best practices. If we project $88,560, that's what we're saying.
You can verify it: Every number we report comes from your own analytics. You can check our math. We only count statistically validated wins at 95%+ confidence, so you're not relying on our opinion.
Better for decision-making: "You'll make $88,560" is easier to understand than "you'll make $60K-$100K with 70% confidence." Both are honest, but one is actionable.

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The ROI Calculation Formula

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Here's the math so you understand exactly what we're doing:

For a single winning test:

Monthly Incremental Revenue × 8.856 = 12-Month Projection

(The 8.856 multiplier comes from: $10,000 × 3 months × [1 + 0.8 + 0.64 + 0.512] = $88,560)

For your total program ROI:

(Total 12-Month Projected Revenue from All Winning Tests - Total Program Costs) / Total Program Costs × 100 = ROI%

Example with multiple tests:

Test A projects to $88,560 over 12 months
Test B projects to $65,000 over 12 months
Test C projects to $42,000 over 12 months
Total projected revenue: $195,560
Your program cost: $60,000 (12 months at $5,000/month)
ROI = ($195,560 - $60,000) / $60,000 = 226% ROI

What You See in Our Reports

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Every month, you get a detailed report showing:

Per Test:

What we tested and why
The result (winner, loser, or inconclusive)
The lift percentage (e.g., +15% conversion rate)
The 12-month revenue projection for that specific test
Key learnings

Program-Level:

Total number of tests run
Number of winners
Cumulative monthly incremental revenue
Projected 12-month total
Quarterly breakdown

Business Review (Every 90 Days):

Trend analysis (are we winning more tests each month?)
Performance by test category (which types of tests win most?)
Updated 12-month projection
Strategy for next quarter

The Reality Check

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Our ROI projections are conservative. We use 20% quarterly decay, which means we're accounting for real-world degradation that most agencies ignore. We only count statistically validated wins. We don't include test learnings that didn't hit statistical significance, even if the direction looked good.

This means our projected ROI is usually lower than what aggressive agencies promise. But it's also realistic. And when you hit our projections—or exceed them—it builds real trust.

Why This Matters

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The reason we've built this system is simple: we're compensated based on your results. Our guarantee says your service pays for itself within 90 days through extra profit, or it's refunded. We can only make that promise because we know our model works. We've tested it. We track it. And we're transparent about every calculation.

When you work with Hagmer, you're not guessing whether CRO is worth it. You're seeing exactly what it's worth every single month.

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Terms & Conditions

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Terms & Conditions

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Terms & Conditions

Last Updated: Nov 17, 2025, 12:00 AM

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