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Post by Co-Founder & CPO Katherine Berry: The tool every marketer should create: the ROI Calculator
One of my main roles as Allocadia’s Chief Product Officer is to ensure customers are receiving measurable value from our product. I spend a lot of time helping our customers build a foundation to accurately measure their marketing ROI and ultimately make better decisions on their marketing spend.
Recently, I came across an article that reminded me of the importance of defining (or more accurately quantifying) another ROI: the ROI on the value of a technology solution. The article, “How to Unseat an Incumbent,” said the number one (42%) reason companies changed vendors was because the challenger provided a ‘solid business case for change.’ Close behind in second, it said that 41% changed vendors because of ‘unrealized ROI;” that the current vendor “did not deliver the knowledge or training to realize the value in the solution.”
We developed an ROI calculator to help our customers with this very challenge. Based on my experience quantifying the value of our marketing technology for customers, I’ve come up with a few suggestions that can help you make sure you are delivering ROI knowledge to your prospects and customers.
- Have an ROI Calculator: This is by far the best tool you can have in your arsenal to help demonstrate ROI. Allocadia’s ROI calculator quantifies the benefits of using Allocadia in three distinct areas:
- Cost Savings: The calculator includes a “current state” and a “future state” of time spent on marketing budgeting and planning activities inside of marketing organizations. The core value of our solution is that it should speed time to doing these operational functions. Therefore, based on headcount costs, we can produce a cost-savings benefit. We also have another cost-savings calculation based on reducing wasted marketing spend that is not aligned to company objectives for example.
- Revenue Generating: Our customers have ongoing insight into global marketing investments and Marketing ROI (via our CRM connectors that pull in revenue data alongside their spend). As such, we encourage our customers to think about the percentage of marketing investments they can re-allocate to the higher-performing, revenue-driving campaigns, and start to identify how much potential additional revenue the marketing team can drive. Our customers tell us that they re-purpose anywhere between 5-20% of their marketing investments by knowing which campaigns, regions or objectives for example, drive the most revenue. This starts to paint a picture for our customers on how they should use and benefit from our technology.
- The “not so easily measurable” benefits: As part of our calculator, we also point to the “softer” benefits derived from using our software, and still get customers to think of these alongside the quantifiable benefits. Customers can evaluate the benefits of things such as increasing marketing credibility or C-Suite communications.
- Incorporate the ROI business case into the sales and post-sales process: Coordinate an internal training session where you train your sales and customer success teams on the ROI business case. Your customers will appreciate this level of conversation with sales: they’ll see that you understand their objectives, and they can also use the information to help get buy-in internally. Incorporating it into the post-sales process, with the Professional Services and Support organizations, is equally important – as the article above mentions – to ensure that customers are experiencing value with your product. This will help ensure they stay your customer.
- Incorporate ROI metrics in marketing content: Customer case studies, for example, should incorporate the ROI benefits customers have experienced using your product. I know, this is easier said than done! But this is something that an ROI calculator can help with. Be sure people understand the value you provide.
- Incorporate ROI into your product: Look for ways that you can automate capturing and communicating back ROI via your product. The first step is logging specific activities that relate to your ROI metrics, such as number of logins, time spent in the application by activity or areas used in the application. Once these metrics are being captured, send out an automated monthly email to your users summarizing their ROI statistics or, even better, build a dashboard into your product for a real-time view into ROI metrics.
Measuring ROI continues to be one of the most challenging problems for marketers. My Co-Founder and twin sister recently wrote about “The opportunities that await marketers who solve the hard problems” in her blog series Leading in Change. With tools like these, ROI is one ‘hard problem’ you can take on!
Do you have any “ROI proving” tools or tactics that you use with customers? We’d love to hear your ideas. Message me via LinkedIn if you’d like me to send you a copy of our ROI calculator.
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Allocadia Co-founder and Chief Product Officer will share her insights about designing software for marketers. Katherine shares the product vision and progress about the Allocadia product and how her team is working to provide customers with the best user experience an enterprise marketing solution can offer.