TIG #70: Master the Art of Proving ROI with This Template

In a world where every dollar counts, can you confidently show your customers that your product is worth their investment?

Most teams find that proving Return on Investment (ROI) is hard.

I've seen ROI calculators in Excel and elaborate EBR decks, however, it's rare to see a simple and standardised ROI document backed up by data and completely automated.

But we can't just accept the "it's too hard" excuse. 

In today’s economic climate, with tighter budget scrutiny, customers are more cautious than ever about their investments. They need solid proof that your product delivers tangible value to justify continued or increased spending.

A few months ago, I published this newsletter on How to Automate your EBR deck and with the right data and tool you can do the same for your ROI statement too!

To create a standard document, you need to know 3 things:

• How much your customer invests in your solution
• What measurable outcomes your products/services deliver
• How they translate to dollars

In this edition of the newsletter, I will be sharing how to create and automate an ROI statement, so you scale ROI communication to EVERY customer.

What Metrics Can You Use To Prove ROI?

Calculating ROI (Return on Investment) involves determining the financial benefits gained from an investment compared to its cost.

The ROI calculation is simple:

'Total Costs' are any costs associated with achieving those gains. It includes all expenses related to implementing and maintaining the investment.

For a SaaS product, this might include:

• Subscription or licensing fees
• Implementation costs
• Training costs
• Maintenance and support costs

This is usually the easy part of the calculation, as you can often pull all of the purchased products and services from the CRM.

'Total Benefit' is the total revenue or benefits generated from the investment. This can include increased revenue, cost savings, or other measurable benefits.

This is where it gets a little harder, as many of the benefits products and services generate aren't directly quantified in $$s.

Here are 6 metrics you should consider when you look at calculating 'Total Benefit':

1. Cost Savings: Quantify how much money the customer has saved by using your product compared to their previous solutions or methods.
2. Revenue Increase: Highlight any increase in revenue that can be attributed to the use of your product, such as new customer acquisition, upsells, or cross-sells.
3. Time Savings: Measure the reduction in time spent on tasks due to automation or streamlined processes facilitated by your product.
4. Efficiency Gains: Calculate improvements in productivity, such as faster completion times or increased output.
5. Error Reduction: Quantify how your product has reduced errors, rework, or downtime.
6. Compliance and Risk Management: Illustrate how your product helps the customer stay compliant with regulations and manage risks. 

Choose the metrics that make sense for your product and the value proposition you go to market with and ensure you're able to capture this in-app.

When you capture these you can create a baseline calculator that can translate them into $$s.

Automating Your ROI One Pager

In today’s fast-paced business environment, customers need to see the tangible benefits of their investments, but might not necessarily have the time to sit through an entire EBR.

What's better for that than a quick one-pager?

The other thing to keep top of mind is that many businesses now have buying committees made up of people who have never used (or heard of) your product.

Your champion can benefit from leveraging a one-pager ROI document to share with other decision-makers and influencers in the buying committee.

An ROI one-pager:

• Builds Trust
• Drives Renewals
• Encourages Expansion

The good news is that you don't have to create your own ROI template from scratch.

Matik has this INCREDIBLE one that you can leverage:

Once you determine your key ROI data-points and create your template, you can automate this document, so it's simple and easy for your team to have these strategic conversations.

Using an automation tool like Matik, you can leverage a template like this one, plug the core metrics for the ones that make sense for your business and voilá!

A document your entire team can use to prove ROI, in one click!

When to Have the ROI Conversation

Knowing when to present an ROI one-pager can make all the difference:

• Post-Pilot or proof of concept: After your customer has tested your product with a small pilot, it’s the perfect moment to showcase the early successes and secure buy-in for an expansion or larger contract.
• Enterprise Business Reviews: While EBRs are often more detailed with adoption data, supplementing them with an ROI one-pager provides a concise summary that highlights key achievements.
• Renewal Discussions: As you approach renewal periods, having a ready-made ROI one-pager can help reaffirm the value your product provides.
• Ad Hoc Requests: You might need proof of ROI at any time, such as when a company is being acquired or a new decision-maker joins the business. Being prepared with a one-pager ensures you’re always ready to deliver.

TL'DR

Want to have better conversations about the value your product creates for customers?

Create a ROI One-Pager by:

• Finding the data points that will feed your ROI Calculation
• Translate those data points into $$s
• Create your ROI One-Pager Template (Use Matik's as a starting point)
• Automate the ROI One-Pager using Matik

See you in 2 weeks!