Customer ROI Modeling

Customer ROI modeling enables you to approach financial analysis from the customer's perspective.

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What is Customer ROI Modeling?

Customer ROI modeling will help your customers answer questions they always ask:

Will I get back more than I spend?
Is the price fair based on the expected benefits?
Can I prove the expected return on investment to other stakeholders?

Understanding how your customers make financial decisions and helping them make their process easier and faster is critical to improving growth and profitability.

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We help our clients build a transparent, data-driven, accurate, and believable ROI model to help customers make purchase decisions.

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Drivers of customer ROI include:

BREADTH. How many people will the solution affect? The greater the breadth, the higher the potential return.
REPETEABILITY. How frequently will people use the solution? The greater the repeatability, the higher the potential return.
COST. How costly is the task to perform -without- the solution? The greater the cost of the task, the higher the potential return,
COLLABORATION. To what extent will people need to collaborate to benefit from the solution? The greater the collaboration component of the task, the higher the potential return.
KNOWLEDGE. What is the reuse of the information created through the use of the solution? The greater the use of the knowledge, the higher the potential return.

How does a Customer ROI Modeling Engagement work?

Our pricing and packaging engagements follow a proven six-step process:

Identify Total Benefits of Ownership (TBO): We'll help you identify the directly quantifiable benefits and indirect benefits that customers receive from the solution.
Model the benefits: Once direct and indirect benefits are clear, we will create a model to input specific customer information to calculate benefits.
Identify Total Cost of Ownership (TCO): The ROI model's believability depends on the TCO's complete transparency.
Model the costs: Once all the costs to the customer are transparent, we can create a model to input specific customer information to calculate costs.
Add formulas to complete the model: Well-designed formulas allow you to adjust assumptions that are supported by them.

Following our five-step process, you can be confident that your ROI model will help your sales organization accelerate purchasing decisions.

Where can I learn more?

Software Profit Streams: A Guide to Designing a Sustainably Profitable Business, an Amazon Best-Selling book by Jason Tanner and Luke Hohmann, details Customer ROI Modeling. Learn more about the book, the Profit Stream Canvas, and how you can increase profit at any stage of the solution lifecycle through Solution Profitability Management.

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