You can be the Apple of tech, the Victoria’s Secret of underwear, the Aunt Jemima of pancake mix, but if your product can’t tie to ROI, then it’s destined for the scrap heap.
It’s important that a product attracts users. But what’s even more essential is that it retains them: According to Gartner Group, 80 percent of a company’s future profits come from 20 percent of its existing customers. If your product’s ROI isn’t readily apparent, those customers may not be around for long, jeopardizing most of tomorrow’s revenues.
In 1990, coffee brand Maxwell House launched its Ready-To-Drink instant coffee. The pre-brewed java was meant to save sippers time and hassle, but when its packaging turned out not to be microwave-safe, the coffee lost its buzz. Drinkers liked the taste, but the ROI wasn’t there — it didn’t save time, dish washing, hassle, or money — so customers weren’t there, either.
Don’t be like Maxwell House. Create and market your product with ROI in mind. Give customers what they want, when they want it, and — most importantly — prove to them that you did.
The Two-Pronged Proof of ROI
Regardless of your product — a B2B technology, the next great smartphone, or whatever it may be — there are two cardinal indicators of ROI: adoption and impact.
Adoption is simple. It refers to how many people are using your product and engaging with your brand. When it comes to measuring adoption, take a tip from SalesforceIQ, formerly RelateIQ. Instead of watching revenue alone, SalesforceIQ tracked adoption by measuring the time users spent in its system. This gave the software brand an additional selling point: Customers didn’t care how much money SalesforceIQ was making, but they were happy to hear that it engaged users more than competitors’ CRMs did.
The second indicator of ROI is bottom-line impact. How many dollars, hours, and resources have customers saved using your product? I once attended a presentation where LinkedIn Sales Navigator presented case studies to educate the market on social selling. I remember one case study that showed how a sales rep using the software uncovered a relationship resulting in a multimillion-dollar deal. Now that’s impact.
Once you’ve linked your product to ROI, it’s up to you to put it on display for customers. Here’s how I suggest sharing the good news:
1. Chart a course for success. Success is hard to find if you don’t know what it looks like. So when you start the sales process, be sure to discuss with the customer which metrics or outcomes indicate success.
A brand that excels at helping customers understand success prior to selling is Hootsuite. The Hootsuite team knows likes and retweets get all the attention as social success metrics, so it educates leads using its blog about what other figures indicate a smashing social campaign. Because just 34 percent of business leaders think social strategy affects business outcomes, Hootsuite’s sales depend on it showing otherwise. On its blog, the software company uses examples to suggest benchmarks for reach, site traffic, lead generation, conversions, and revenue generated.
2. Give the client a map. Once you’ve defined success with your customer, help them monitor progress toward that destination. How you do this depends on your product, but especially for B2B software products, a metrics dashboard is typically the best solution.
Use or create a tool that fits with your product, and be sure it’s user-friendly, because it should help customers measure every byte of data associated with the product. At Node, we’re Salesforce natives, so we use its Monthly Cohort graph as one of our tools to display how many prospects or opportunities were generated. We can filter the graph by month to see how each campaign has performed. This helps us determine if the product’s effectiveness has changed over time and gives a clear window into ROI.
Track everything about your product. Node is building an account-based intelligence platform, so we’re helping customers track site traffic, leads generated, sign-ups and conversions, and revenue. This helps customers set goals based on current figures. Did the customer describe success as a 75 percent close rate from leads? Our platform helps users understand, in real time, where they stand in relation to that goal.
3. Pick mile markers for review. Your ROI-first product should help customers track success metrics, but it’s also essential that you routinely and formally share results. Choose intervals to provide customers a clear view of the ROI your product is generating, and follow up with opportunities for discussion. At Node, we use quarterly business reviews to showcase our product’s value over the period, and we offer to meet with clients to examine the results.
This formal checkup brings ROI concerns to the surface before they create a dissatisfied client, and it helps all parties see how the goals set at the start of the sales cycle have come to fruition. You’ll be able to redefine success metrics if the client’s needs have changed, enabling them to make better use of your product during the next quarter.
Salesforce shines again in this arena with its Campaign Performance report. Using a graphical, adjustable interface, the software report gives customers insight into the overall health of their campaigns. The report’s date range is adjustable, helping clients to see which campaigns are the star performers over a set period.
ROI is the difference between a hit and a miss in the customer’s eyes. So it isn’t enough to build a great product: Help the customer see its greatness by defining, tracking, and sharing its success at regular intervals. Remember, you might have the world’s best-tasting coffee, but if the customer can’t see that, then it might as well be dishwater.
Falon Fatemi is founder and CEO of Node, a stealth startup of ex-Googlers backed by NEA, Mark Cuban, Avalon Ventures, Canaan Partners, and more. Falon has spent the past five years as a business development executive doing strategy consulting for startups and VCs and advising a variety of companies on everything from infrastructure to drones. Previously, Falon spent six years at Google starting at age 19. As one of the youngest employees in the company, Falon worked on sales strategy and operations focusing on global expansion, Google.org, and business development for YouTube.