Rediscover The Lost Art of ROI 🪙

ROI is a hot topic a lot of people talk about, but very few actually implement. But in today’s market, it’s critical to make sure you’re getting value from every investment you make — whether that’s a time and focus investment on a project or a tangible financial investment in a technology solution.

But fear not — the lost art of ROI can be rediscovered. To help us, Ian Campbell, CEO of Nucleus Research joined The CFO Show to break down the importance of having the right method behind establishing and communicating ROI today and how you can leverage it for increased profitability.

Let’s dive in ⤵️

It’s Time To Retire the Old ROI Playbook…

Before this year, prioritization for projects and solution investments relied heavily on:

• What competitors had or were doing

• What’s ranked highest on vague lists

• The newest, shiniest innovative solutions

But features aren’t enough to guarantee ROI anymore — and with solutions, strategies and innovation constantly innovating, keeping up with competitors requires far more than matching their tech stack and project list.

ROI in a New (More Effective Light)

Today, finance teams need to know that anything initiated will ultimately have an ROI. Want to make a stronger case for your project or solution? 

Try framing ROI in terms of payback. 

It’s nice to know that a new tech solution will have 200% ROI. But that’s not always enough to warrant leadership buy-in. Ultimately, when assessing solutions and projects, you need to clearly establish how the opportunity will:

✅ Improve productivity
✅ Reduce cost
✅ Increase profitability

Want to take it a step further? Create a clear timeline in which you will achieve ROI (or even see profit). 

One phrase that will always garner attention (and prioritization) is: 

“This product (or project) will pay for itself in __ months.”

By simplifying the message of ROI, you can better prioritize projects within your existing resource constraints. Projects are much easier to validate when you know they’ll provide a return on a specified timeline.

Translating Across Teams: The Full Gamut of ROI

Approaching ROI with this method is fantastic for finance teams. But weaving in a holistic, business-wide approach will allow you to make better decisions, prioritize and close more deals. But it’s up to you to help integrate. Ian shares what he’s learned and what it means for specific teams.

Sales: 
When working with prospects, your sales team needs to be highlighting ROI in terms of payback from the very beginning. Features of your solution taking the limelight in recent years have forced the ROI conversation deeper into the sales funnel, it belongs front and center. 

Take the time to hop on a sales call and provide feedback to your sales leaders. When could they bring ROI into the conversation? What did they miss? And where did they provide unnecessary information upfront? 

Marketing: 
Whereas sales close the deals, marketing often sparks them. Aligning your marketing team on how to share ROI upfront to attract attention (and bolster your pipeline) is essential in today’s market. 

Highlighting product features can be tempting, but this can wait. Sharing payback with your audience should be among the first things on your marketing team’s mind.

Product Development: 
When finance can convey to product development teams exactly what brings value to customers, each iteration delivers greater ROI rather than ‘nice-to-have’ additional features. 

As a finance professional, you’re often on both sides of the deal. You help decide what to prioritize internally and you’re often making purchasing decisions. This means you can help each team understand what the buyer actually cares about by approaching ROI as an advocate and from the customer's perspective.

Want to master the art of ROI to improve productivity, reduce costs and increase profitability? for improved productivity, reduced costs and increased profitability? We cover everything you need to know. Tune into The CFO Show for the full conversation and check out Ian’s book The Value Sale to learn more.

In case you missed it…

How’s your relationship with HR? Studies show that despite the incredible importance of this relationship, only 45% of HR professionals feel like they have a good rapport with their finance counterparts. Why do these gaps exist? And how can we close them? We spoke with Tracy Edkins, CHRO, Board Member and Advisor to break it down.

What’s next…

Driving organizational success from the finance seat requires close collaboration with other teams — Melissa and Tom dive into the specific skills every finance professional needs to have to be the best business partner possible to push your business (and career) forward.