Comments on: The Problem with ROI http://asalesguy.com/2009/12/23/the-problem-with-roi/ Just another WordPress weblog Fri, 30 Jul 2010 05:18:16 +0000 hourly 1 By: Keenan http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-674 Keenan Tue, 29 Dec 2009 09:02:36 +0000 http://asalesguy.com/?p=2689#comment-674 No one would pay for the pass by itself. But, I don't think that's the way it should be measured. I wouldn't pay a restaurant for better service, but I do expect it. No one would pay for the pass by itself. But, I don't think that's the way it should be measured. I wouldn't pay a restaurant for better service, but I do expect it.

]]> By: themadpeacock http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-673 themadpeacock Tue, 29 Dec 2009 04:11:45 +0000 http://asalesguy.com/?p=2689#comment-673 Measuring the ROI on customer experience can be difficult when the sample size is small as it often is in B2B Sales. One of the advantages of the B2C environment is that it is possible to run tests and collect actionable metrics.<br><br>Another way to go would be to offer the RF tags to season pass users, super users or at an extra cost. See if people value it enough to pay extra. Measuring the ROI on customer experience can be difficult when the sample size is small as it often is in B2B Sales. One of the advantages of the B2C environment is that it is possible to run tests and collect actionable metrics.

Another way to go would be to offer the RF tags to season pass users, super users or at an extra cost. See if people value it enough to pay extra.

]]> By: Keenan http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-379 Keenan Tue, 29 Dec 2009 02:02:36 +0000 http://asalesguy.com/?p=2689#comment-379 No one would pay for the pass by itself. But, I don't think that's the way it should be measured. I wouldn't pay a restaurant for better service, but I do expect it. No one would pay for the pass by itself. But, I don't think that's the way it should be measured. I wouldn't pay a restaurant for better service, but I do expect it.

]]> By: themadpeacock http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-377 themadpeacock Mon, 28 Dec 2009 21:11:45 +0000 http://asalesguy.com/?p=2689#comment-377 Measuring the ROI on customer experience can be difficult when the sample size is small as it often is in B2B Sales. One of the advantages of the B2C environment is that it is possible to run tests and collect actionable metrics.<br><br>Another way to go would be to offer the RF tags to season pass users, super users or at an extra cost. See if people value it enough to pay extra. Measuring the ROI on customer experience can be difficult when the sample size is small as it often is in B2B Sales. One of the advantages of the B2C environment is that it is possible to run tests and collect actionable metrics.

Another way to go would be to offer the RF tags to season pass users, super users or at an extra cost. See if people value it enough to pay extra.

]]> By: Keenan http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-372 Keenan Thu, 24 Dec 2009 12:28:11 +0000 http://asalesguy.com/?p=2689#comment-372 Great comment,<br><br>It is with out a doubt an art and a science. Unfortunately, in the <br>cover your ass world of corporate America everything ends up in your <br>number one. Everyone is looking for proof. No one wants to go on <br>intuition and be wrong. There is a cost to this narrow thinking.<br><br>This is why I was so impressed with Vails decision.<br><br>Thanks for the input David. Great comment,

It is with out a doubt an art and a science. Unfortunately, in the
cover your ass world of corporate America everything ends up in your
number one. Everyone is looking for proof. No one wants to go on
intuition and be wrong. There is a cost to this narrow thinking.

This is why I was so impressed with Vails decision.

Thanks for the input David.

]]> By: davemacdonald http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-371 davemacdonald Thu, 24 Dec 2009 05:41:13 +0000 http://asalesguy.com/?p=2689#comment-371 Jim, this is a very astute observation. One of the reasons I was attracted to management accounting and became a Certified Management Accountant in Canada was to be able to help businesses connect sound, often intangible, investments with their bottom lines. It's not just about valuing intellectual property or other similar assets.<br><br>In my mind, you measure ROI on two types of spending:<br><br>1) Operational (typically pretty easy to match the investment with the return or intuitively understand that a simple sunk cost is the cost of doing business)<br><br>2) Strategic Investment Pool (the return, financial and strategic/nonfinancial, on a specific initiative, regardless of the specific cost items inside that initiative)<br><br>It's possible that, whether consciously or not, the RF readers were part of that second type which you alluded to as Customer Experience Projects. Rather than the ROI of a Customer Experience Project, it might be interesting to take a project, do some checks and balances against a strategy (maybe a balanced scorecard approach or some approximation of that) and measure the ROI across non-financial components as well.<br><br>In this kind of system, the RF chips become part of the brand, just as much as a logo, ski run or lodge or whatever other differentiators there are for mountains (you'd know this better than most of us here, I bet).<br><br>It's easy for managers in large companies, or owners and managers in small-to-medium sized companies, to get tied up in the return of specific line items. I think that in doing that, they've lost sight of their strategy or vision and replaced it with short-sighted financial return. I don't think that you can do something "just because" in a business; even though it seems like a good idea, there has to be, at minimum, an intuitive link to ROI followed by some kind of quantification and therein lies the talent of the decision-maker and analyst. Jim, this is a very astute observation. One of the reasons I was attracted to management accounting and became a Certified Management Accountant in Canada was to be able to help businesses connect sound, often intangible, investments with their bottom lines. It's not just about valuing intellectual property or other similar assets.

In my mind, you measure ROI on two types of spending:

1) Operational (typically pretty easy to match the investment with the return or intuitively understand that a simple sunk cost is the cost of doing business)

2) Strategic Investment Pool (the return, financial and strategic/nonfinancial, on a specific initiative, regardless of the specific cost items inside that initiative)

It's possible that, whether consciously or not, the RF readers were part of that second type which you alluded to as Customer Experience Projects. Rather than the ROI of a Customer Experience Project, it might be interesting to take a project, do some checks and balances against a strategy (maybe a balanced scorecard approach or some approximation of that) and measure the ROI across non-financial components as well.

In this kind of system, the RF chips become part of the brand, just as much as a logo, ski run or lodge or whatever other differentiators there are for mountains (you'd know this better than most of us here, I bet).

It's easy for managers in large companies, or owners and managers in small-to-medium sized companies, to get tied up in the return of specific line items. I think that in doing that, they've lost sight of their strategy or vision and replaced it with short-sighted financial return. I don't think that you can do something “just because” in a business; even though it seems like a good idea, there has to be, at minimum, an intuitive link to ROI followed by some kind of quantification and therein lies the talent of the decision-maker and analyst.

]]> By: Daniel Waldschmidt http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-370 Daniel Waldschmidt Wed, 23 Dec 2009 20:38:34 +0000 http://asalesguy.com/?p=2689#comment-370 You nailed it. Making decisions about the customer experience based on spot interactions sounds a lot like mediocrity. It's the experience that matters -- the details (that include the RF system). You nailed it. Making decisions about the customer experience based on spot interactions sounds a lot like mediocrity. It's the experience that matters — the details (that include the RF system).

]]> By: Keenan http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-369 Keenan Wed, 23 Dec 2009 19:09:37 +0000 http://asalesguy.com/?p=2689#comment-369 NPS? <br><br>Today it's more than exceeding expectations. It's how did we impact the customer emotionally. How did we impact their overall experience, whether they expected it or not? NPS?

Today it's more than exceeding expectations. It's how did we impact the customer emotionally. How did we impact their overall experience, whether they expected it or not?

]]> By: Keenan http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-368 Keenan Wed, 23 Dec 2009 19:06:02 +0000 http://asalesguy.com/?p=2689#comment-368 An experience is an experience; because something costs less, does that mean customers care less about the experience? Does a wait in line at KFC feel better than a wait in line at Nordtroms? <br><br>I think experience is becoming less associated with "price." Especially with the impact of social media. An experience is an experience; because something costs less, does that mean customers care less about the experience? Does a wait in line at KFC feel better than a wait in line at Nordtroms?

I think experience is becoming less associated with “price.” Especially with the impact of social media.

]]> By: Ronald de Jong http://asalesguy.com/2009/12/23/the-problem-with-roi/#comment-367 Ronald de Jong Wed, 23 Dec 2009 18:10:14 +0000 http://asalesguy.com/?p=2689#comment-367 Great article, I agree. <br>If we use common sense we all know that exceeding expectations lead to customer loyalty. A measurable return on the investment is the biggest problem selling a Customer Experience improvement project at potential clients. For now the NPS is the only measurable way for customer experience.<br><br>Ronald de Jong<br>Ripples Business Development Great article, I agree.
If we use common sense we all know that exceeding expectations lead to customer loyalty. A measurable return on the investment is the biggest problem selling a Customer Experience improvement project at potential clients. For now the NPS is the only measurable way for customer experience.

Ronald de Jong
Ripples Business Development

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