How to develop an effective ROI model and measure success
Your return on investment model is going to build in a number of ways. Some of the examples I have given may or may not be relevant to your business. You can always add your own, after all, every business situation is somewhat different.
Measuring the potential effect of a step change in direct marketing and lead generation activity.
Let us say that current practise enables you to undertake 1 campaign per month at present, and that an average return from each averages £2000. If implementing a data driven sales and marketing solution now enables you to execute 3 campaigns per month, and no campaigning takes place in July, August and December, the potential upside post-implementation will be:
9 effective months x extra 2 campaigns per month x £2000 payback per campaign = £36000
Saving data processing and supplier costs
Being able to undertake basic database maintenance your self will cut down your bills on bureau-based data processing. Only you will know what this might add up to, but across the course of a year £5000 is likely to be a reasonably safe bet for many of us. If your application offers web based data processing as part of the solution, this will cut costs further for when you would otherwise periodically need to 'deep clean' using a data processing bureau.
Improved distributor support
Integrating your distributors using lead management is increasingly seen as a value add activity by them. Distributors typically lack the time and resource to create their own sophisticated infrastructure, and increasingly will spend more time pushing products and services of suppliers that give them high volumes of fresh, hot lead referrals. Let us say that deploying a solution that pushed more leads out to distributors in 'real time' added 10% to your indirect business. What would that be worth? Now bracket that assumption with an upside and realistic downside (say, 5% and 15%), what's the spread of the likely return this may accrue?
Better resource management
How much time is currently spent inside your business by marketing people managing suppliers of one kind or another - telemarketing agencies, data processing bureaus, mailing houses, email marketing bureaus?
Web based data-driven sales and marketing applications that support controlled external access enable suppliers to login and work in your application, or manage the data extraction and re-import themselves. This saves time, and enables someone who might have spent half their time managing suppliers to be more productive within the business. Even if 25% of their time is reclaimed, that could mean another _ of a full time employee (FTE), worth between £8000- £10000 including on-costs.
Email costs
Some web-based applications such as Market Developer provide functionality to transmit, track and analyse email transmission. Templates can be used to create HTML for the email content, and the whole process is handled within your application. Because email transmission is so quick and immediate, it is tempting to do lots of it, so costs can quickly add up when using an agency to create and transmit for you.
Once again, you'll know your own costs, but a single campaign can easily cost £500-750 in production and transmission costs. At an assumed frequency of one a month, you will save between £6000-£9000 in a year.
Sales forecasting
How much time does a field sales person spend each week filling in pipeline forecast forms? If this hasn't been automated yet within your business, and assuming you have a sales manager or director who is capable of delivering accurate forecasts, each field sales person might easily be spending a half day a week putting them together. Automate the process, and you'll get another call per sales person per week. Let's say conversion to calls is 1 in 6, you have 3 field sales people, and that there are 45 effective weeks per year, that could mean an additional 22 sales per year. Let's say that the margin on a typical sale is £1000. That means that better use of field sales resource can add up to £22000 per annum.
Back to White Papers