I picked up on Forrester AR discussion about examples of the quantified business value generated by AR. (see http://community.forrester.com/message/9655#9655) for full details.
Kevin Lucas was after examples of:
- AR primarily delivered the business value alone
- AR delivered the business value in tandem with others. In these cases, was some mechanism used to attribute a quantifiable proportion of the business value to AR and, if so, what mechanism was used?
So here is what I came up with:
- Prior to a briefing beginning with a former client the analyst begun the session by saying ‘I have a call with a current client that wants to know if they should renew their contract with you and they are asking me to advise them. By the end of the briefing I need to know how to answer them’.
Kevin’s questions to this: How did the vendor know that any subsequent renewal was caused by the analyst? And, if they had such evidence, how did the vendor assign numerical value to AR? For example, did they assign all the renewal value to AR? Did they feel that there were other renewal contributors and, if so, did they apportion value among the contributors?
My response: I was with the European MD he did not ask the analyst the name of the account, nor follow up with the sales, so no precise value was assigned to AR. But it certainly reaffirmed to the MD in case he was in any doubt of the importance of briefing analysts as they do have a direct impact on sales decisions.
- An analyst who provided a vendor I was working for with a set of leads as a thank you for research the vendor had provided him that helped him with his presentation.
Kevin’s questions: Did this vendor use a provisional sales order size as the value of each lead here or did it only assign value if the deals were closed? Leads aren’t always easy to size financially, because so much can happen to the deal size as it migrates down the sales funnel, so did this vendor manage to assign a value to them? I’m guessing that, in this case, all of the business value here was attributed to AR, or did AR face any challenges even when claiming that?
My response: Some more context the organisation in question is 100% channel focused so all leads generated are fulfilled by the channel and all marketing activity is designed to generated leads to then be fulfilled upon. In this case the leads where provided directly to the marketing team to then work on further for ultimate fulfillment. AR was not concerned with the conversion ratio or revenue generated from the leads. For the organisation this has been by the most concrete value of AR to date. Again the key metric is the generation of value not the quantity of the value – hope that makes sense.
- The sales person asking for analyst reports to help close a deal
Kevin’s question: Here again I’m interested to know how much value was attributed to AR. Did the vendor know whether the report was the deal clincher or was it just one factor of many? Did the vendor attribute all deal value to AR or did it attribute only some because other players, like the sales force, were assumed to be contributors to bringing the deal in?
My response: On this one the aim of AR was to fulfill the request demanded by sales and not look further into whether the deal was won or lost and the extent to which the AR coverage caused the deal to be successful or not.
The take away from all these examples is that, in my view there is a limit to the exact $ or % value you can assign to AR. You remind me of the 50% of my advertising is effective but I don’t know what 50% adage. My feeling on measuring putting ROI/value to AR is that there is value in all of the interactions with analysts and their firms but it’s all about context and business objectives, which in many cases are relative to the company and the individuals involved.
A couple of other scenarios to consider:
An analyst that tells a CEO that a business model is flawed and going down that route could spell the end of a company – what value do you put on that?
The analyst that suggests a vendor to partner with and that comes to fruition what value do you assign to that.
Currently I am doing a lot of work with emerging startup companies and the AR experience I find is very, very, different from established vendor (sorry all I have a habit of stating the obvious). With an emerging company you get a lot of time with the decision makers. Rather than specifics AR has a HUGE role to play won’t bore you with the details but although the value in most instances is not quantitative (sorry, frustrating for you I know) there is NO way that AR is forgotten about. My view is the AR needs to look at ways in which it can add value which links back to your paper on Engineering AR, for me working in the world of startups I find that every ounce of AR must deliver value however you define it.
My final point on this one AR is an art and science; if you measure everything you take the art out of it. Social media and marketing measurement software is starting to provide the data, but there must always be a place for intuition and personal relationships.
Look forward to hearing your comments on this one.