We all know customers are fixated on metrics to evaluate technology investments, such as IT spend as a percent of revenue. That’s understandable. The language of business is finance, and organizations know their technology investments must improve the equation. Yet most struggle to translate greater technical capabilities into measurable business value.
So what do you do? You make it easier for them.
When engaging customers, ensure the conversation focuses on the business impact of your solution by moving away from metrics that evaluate technology investments internally and going beyond common measures such as Total Cost of Ownership (TCO).
Here are some better metrics. Use them to elevate the value you’re delivering to a trusted partner. Use them to help your customer view you favorably relative to your competition. Use them to push through stalled deals because your customer needs clear economic justification to make the business case for investing in your solutions.
- Customer interactions. Show how you can reduce the number of failed interactions. Look at such areas as invoicing inaccuracies, poor order fill rates, incomplete transactions or failure to ship a product on time. Show how you can create an alert system to improve visibility/ability to identify areas at risk of failing. Customers will welcome your ideas as quantifying customer satisfaction is always difficult. Be specific when you quantify solution value. The better you do this, the more credibility you’ll have with executives.
- Innovation to support ratio. Show how you can help customers sharply improve the percentage of their technology spend devoted to driving business growth relative to internal support. Plot your proposed projects and any competing projects on a grid (see below) to present your customer a view of this ratio. Leading companies target a 3:1 ratio and want it trending upward.
- Customer usage. Present a plan to help measure how many customers will actually use the alternative new products, services, features or tools your customer is evaluating. For example, from a revenue perspective, show how to measure whether partners and suppliers are collaborating to reduce time to market for product development. Demonstrate a way to track new markets, channels or cross-selling opportunities resulting from your solution. Suggest how your new service could be more effective and/or cost-effective than competing solutions.
- Cost of doing nothing. Quantify the true cost of taking no action. For instance, the investment can be justified by comparing the cost of continuing to use a largely manual process to the cost of the automated solution you’re proposing. Or compare the existing mix of in-house and outsourced resources to your solution and show the impact on how employees spend their time.
What are some example you’ve seen work effectively?
