How do you demonstrate ROI in the service industry?


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Here in the UK, we are a service-based economy. According to the Office of National Statistics, it’s where over 70% of our GDP comes from, with over 80% of our workers being employed within the various service sectors.

And yet when you provide a service, rather than a tangible product, it can be hard to justify the value in it. Sell a cleaning company a vacuum cleaner, and it’s easy to validate. If that new vacuum saves an hour a week in a cleaner’s schedule, you can put a £ sign on that. You can work out what that time is worth and quickly see how soon the vacuum will cover its cost and start delivering a return. With services, the contributing factors aren’t always as visible.

We offer a range of services to clients, and ensuring ROI is understood is pivotal to satisfied customers and ensuring we are delivering for them.

Like us, we believe most people who provide a service want to do so to the very best of their ability. But how do you look your customer in the eye and give them hard facts about the value you have added? How can you demonstrate a quantifiable return on their investment?

Agree on the priorities and the timelines

Right at the start of your relationship, you need to identify the priorities your customer has. What are the key things they want to achieve or improve, and within what timescales do they expect to see results?

Let’s say you offer a virtual customer service telephone service. Measurements could include the customer retention levels, customer satisfaction as measured via a survey or spend per customer. In this instance, it is reasonable to agree on some medium-term objectives. If you’re a technology company that provides SaaS product timescales may be much longer.

Start with data

Of course, you can’t measure the effectiveness of a service unless you have a benchmark to measure from. You need to draw that line in the sand before you start. This means discussing with your client what systems they have in place that can provide data, and finding out how you access that. Whether they give you a login to their system or connect you up with a contact who can supply the information, you need to ensure you have the tools to track progress from the baseline.

Report regularly

Having determined the areas that the customer wants to improve, and seeing where the starting point is, then report regularly on those areas. Whether that’s weekly, monthly, quarterly, or some other interval is down to you and your client to decide and will depend on how fast-moving the client’s organisation is. Regular reports not only provide the information on the progress that is needed to demonstrate a return but gives the client confidence in your service.

Review and refine

At set intervals, you need to sit down with your client and look at the data. How have things changed? What challenges have you faced, and how can these be addressed? What are the next set of objectives and over what timescale? Through a process of review and refinement, you can improve the service you provide and increase the client’s ROI.

Demonstrating ROI on a service is not always easy, but can and should be done.

What experiences do you have? Have you found any other great ways to demonstrate ROI? Do share your thoughts by commenting below.

Publish date: 08th October 2019

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