Promising is one thing. Proving is quite another.
That is especially true when choosing marketing technology solutions, since the buying process has become increasingly more complicated. According to the 2016 Marketing Landscape, more than 3,800 solutions are on the market today, compared to about 150 just five years ago. The growth seems unstoppable.
So whether you’re recommending a technology choice to the C-level or a purchasing committee, it’s grown harder to prove you’re making the best choice.
Ask the vendor for evidence
When you’ve found a software solution with the features and functionality you’re looking for, make sure the vendor can provide these 5 proof points to ensure the solution “lives up to the sales pitch” and gives you ammunition to satisfy your stakeholders:
Incremental Revenue – How Much Will It Produce?
First, you’ll need vendor case studies showing how clients have used the solution to drive revenue for their brands. Don’t take their revenue claims at face value, and definitely don’t get distracted by the laundry list of clients that are “using” their software and forecasting great results. Check the facts.
Monetizing a marketing investment is not a simple thing: Even the most innovative technologies may be hard to adopt. They can be difficult to integrate, too far ahead of the consumer, or simply a great idea without a concrete business case.
Total Cost of Ownership (TCO) – What Are The “Big Picture” Costs?
Next, you need to show management that you can roll out this solution efficiently, and the easiest way is to have the vendor to document exactly what other clients have gone through, how long it took, and how much it cost them to put the solution in play.
Ask for the details: licensing fees, upgrade costs, training costs, secondary hardware and software overhead, additional FTEs and headcount increases, because chances those costs are very real and often much higher than the original price tag.
Return on Marketing Investment (MROI) – Is it Worth the Additional Investment?
This is a critical but simple metric: Take your incremental revenue and divide it by the TCO. What you get is a ratio of value to cost.
When presenting to the decision-makers, use this ratio to compare and contrast the options you’ve considered. For example, “We’re selecting this option because the ROI is much more compelling than what we’ve seen from the other solutions in the market; and here’s the data to support that.” Chances are, you’ll be asked for this figure anyway, so present it proactively, and your recommendation will carry a lot more weight.
Net Present Value (NPV) – Will The Investment Make A Profit?
Calculating a three-year NPV is how most organizations choose between investment alternatives. Essentially a way of determining the net profit of an investment at today’s value, NPV takes into account all of the potential revenue, cost, and cash flows from each alternative.
The finance team usually runs these numbers themselves, using their own projections. However, showing the NPV realized by the vendor’s other clients is a great way to solidify your proposal and demonstrate that you speak their language and have an opinion worth considering.
Payback Period – How Long Will It Take To Pay Ourselves Back?
Payback period determines how long it will take for an organization to recoup their costs from a potential investment, based on the projected revenue. When you can say with confidence, “We expect to recoup this investment within X months of implementing the solution, based on the case studies documented by the provider,” you’re making a strong argument for the choice.
Get what you need
It’s your right to ask for this data, and vendors who can document and provide it prove they’re truly connected with their clients: they stay engaged with them from initial sale until they realize value from the solution. The best vendors document this information religiously, so make sure to ask for what you need.
For more information, download this Forrester Research Group study, documenting the Total Economic Impact produced by the Pega Marketing solution. Forrester is a trusted name in the market with a strong framework for evaluating vendor solutions, and the study provides a great example of each of the above proof points.