Possible Difficulties That Can Occur With ROI Tools
A ROI Tool (also known as a Return on Investment Tool) is an analytic program that can quickly calculate the benefit (in terms of dollars) that can be expected on an investment or expenditure. The tool usually factors in any number of variables that contribute to gain or loss. But it may not be as simple as it sounds and difficulties can be experienced not only during the design stage of the tool but also during implementation and actual usage of the tool.
Who Should Use ROI Tools?
Typically, companies who sell high-cost products use ROI Tools to help convince the customer that though the initial purchase may be significant it will provide positive gains in the future. It is a sales tool used to provide these prospective clients with factual, mathematical and financial information that is often necessary for selling high-cost and high-risk products. The type of information an ROI Tool is capable of reporting helps clients make informed decisions about whether or not to invest.
ROI Tools should also be used in marketing departments to determine the effect marketing and advertising activities have on their bottom line. The ROI Tool can help make informed decisions about whether to continue with certain activities, such as a PPC Campaign or a banner ad, or to discontinue and reallocate the funds to an activity with higher returns.
Achieving Success with ROI Tools
Vital to the success of an ROI Tool is getting buy in from the sales and marketing teams. It is crucial that they commit to building, promoting and developing an ROI System from the beginning. Another element of success that follows implementation is the training and development of the ROI Tool throughout the entire organization. Overall, both ‘buy in’ from top level management and the sales force, along with proper training, is required for the ROI Tool to be used to its optimum capacity.
Possible Difficulties with ROI Tools
There are a host of reasons why difficulties can and are experienced with ROI Tools.
One reason is that an ROI Tool may not be treated as a product and therefore its benefits are underestimated or misunderstood. Sometimes the benefits are simply ignored. Without focusing on the value of the benefits it can be hard to spend time using the tool.
Some companies spend time, money and effort in developing their ROI Tool, and then leave it at that stage. As in most cases, an ROI Tool requires some degree of modifications, testing and development so that it can be used to its optimum by the sales force. Too many companies do not conduct further investigation after purchasing an ROI Tool into what the sales force actually requires from it, on a daily basis. If the ROI Tool is not modified to meet the sales force’s needs it can get a bad reputation and worse yet, become neglected.
Another notable reason why ROI Tools may fail during implementation is that they can be somewhat difficult to use at first; explaining to both partners of the company and future sales prospects how the ROI Tool functions can be difficult. Justifying economic concepts can be difficult enough to begin with. Unfortunately, a lot of ROI Tools make it even more so by weighing the measures down with unrelated entities needed to operate it. This only adds to the perception that the ROI Tool is complex and difficult to understand if not fully and properly trained.
Missing it with the Prospect
In the case where a salesperson is not fully trained on the ROI System and doesn’t know how to use the tool in a confident manner, their lack of confidence is reflected on their credibility To the client it appears that the data is not believable and they can even become suspicious of it. Relaying a convincing level of confidence comes from the sales team having a clear understanding of the tool.
Providing a convincing answer the popular client question, “What return will I expect to get from this investment?” depends on accurate, believable numbers that can be explained. Simply using an ROI Tool at the beginning of a product life cycle can make it a lot easier to answer the client’s question.