When allocating any significant amount of budget to aparticular tactic or tool, you need a strategy for demonstrating ROI.Leadership wants to know the value of their expenditure and whether or not it’sthe most effective way to achieve their goals. The bigger the investment, thegreater the demand for a healthy ROI.
But demonstrating ROI isn’t always clear cut. You may beconvinced your tactic was hugely successful or the fact you are completelyreliant on your new tool demonstrates need but can you quantify the benefit inplain terms? Can you point to evidence of success beyond gut-feel?
Super Bowl advertisers face these tough questions everyyear. A thirty second commercial during Super Bowl LIII cost between $5.1 and$5.3 million and production costs push the expense line even higher. Advertisingon the most-watched TV show of the year costs more every year.
There are a variety of ways companies demonstrate Super Bowladvertising ROI today. Market researchers launch viewer studies to measure‘brand lift.’ Social media mentions are strategically fed and then closelymonitored. Companies build tracking capabilities like promo codes into theircampaigns in the hopes of seeing a sales boost or at least growth in purchaseintent.
Investments made in pricing software are no different. How does the solution you’re using to optimize your pricing deliver real ROI? There are several ways to measure this – from margin improvements to shorter sales cycles and many benchmarks in between.
How CorningSet Metrics
Corning Optical Communications recently implemented Vendavo Profit Analyer™ to price, analyze and optimize across more than 200,000 company SKUs. In addition to growing profit, they also wanted to lower IT costs so they replaced their aging, on-premise data warehouse with the Vendavo cloud-hosted option. The result was a lightened IT workload, enhanced security and reduced infrastructure expenses – all quantifiable metrics if the measurement process is established early on.
In addition to moving to a SaaS model, Corning added VendavoProfessional Services to maximize their investment in price optimization. Vendavoconsultants supported Corning’s solution design and configuration, changemanagement, and value measurement.
Specific value cases were created for Corning, including theidentification of negative margin and low margin transactions, creating aprocess to monitor and manage costs-to-serve at a granular and actionablebasis, establishing business routines for optimizing pricing in general andcreating value-based pricing for key products.
“The biggest benefit we experienced with Professional Services was in go-live preparation and planning,” says Ken Foret, manager of pricing enablement for Corning Optical Communications. “The Vendavo pricing consultants worked with us to outline metrics for success, set goals, and then measure those goals precisely and consistently. Those resources have made a huge difference in helping us prove value and progress throughout the organization.”
Corning’s work has paid off. Corning is optimizing pricesacross their wide range of SKUs and sees both significant margin improvementand cost savings. Real, demonstrable ROI.
“Vendavo’s integrated professional services have helped us climb the learning curve faster, implement more smoothly, and deliver on the value of this investment which we’ve calculated in the first year at approximately $10 million in positive financial impact,” says Foret. “Their professional services have been crucial to our success.”
To learn more about how Vendavo has helped Corning realize significant value in their price optimization work, download the full story here.
