Unlocking ROI: The 4-step framework to prove value

With competition intensifying across every industry, return on investment (ROI) is a non-negotiable.

Throughout the past year, across all the Customer Success Collective conferences and meet-ups I've attended, ROI consistently emerged as the most popular and sought-after topic among customer success leaders and professionals. There's a continuous appetite for development in this area.

Companies simply cannot afford major investments without clear financial justification and expectations of strong returns. The days of gut decisions and "trust-me" pitches are over, particularly in the current economy.

Recently, I read a blog post on the Cornerstone OnDemand website titled 5 Steps for Proving the ROI of Your Training Investment. As a Customer Success Manager (CSM) at Cornerstone, I found it insightful for several reasons. The post outlined steps organizations can follow to calculate their return on investment from training programs. Notably, it cited research showing the potential for a massive ROI – as high as 353% – when investing in employee training.

To provide some context on this topic for CSMs, I’m going to delve into the following areas:

What does proving ROI mean – and why is it important?

The concept of ROI stands as a beacon of financial rationale, guiding organizations through the murky waters of investment decisions. But ROI isn't just a metric; it’s a compass that guides organizations through the rocky road of investment decisions.

ROI offers your customers a crystal-clear financial justification for their investments, enabling them to weigh the anticipated benefits, such as efficiency gains, cost savings, and revenue growth, against the associated expenses.

Clear understanding is essential for confidently navigating the ever-changing customer appetite for product adoption. With strategic foresight, we can chart a course through the shifting landscape. It spares organizations from second-guessing their decisions at every turn, allowing them to focus on maximizing the value derived from their investments.

But what’s the connection between positive customer experience and ROI? Here are some stats that should sway you:

Companies with a customer experience mindset drive revenue 4-8% higher than the rest of their industries.
Customer-centric companies are 60% more profitable than companies that don’t focus on customers.

How can Customer Success Managers prove ROI to customers?

Through realizing the value of your product. Helping customers reach their intended goals or outcomes, is the heart of customer success. CSMs ensure that customers recognize and capitalize on the value of their investments. The raison d'être of a CSM is constantly reminding customers of the wisdom behind their product choice and the tangible benefits they reap.

This is more than a mere reiteration of facts; it's about keeping the value proposition at the forefront of every conversation, ensuring that customers never lose sight of it – the very reason they embarked on this journey with the product in the first place.

I like to think of ROI as a shore. Your customer's journey to adopt your product and reap its complete value is like a voyage across an open sea, with that ROI shoreline being the ultimate goal.

For me, this analogy vividly illustrates the importance of always keeping ROI in view, ensuring it remains a focal point in discussions and strategic decisions. As CSMs, it’s our responsibility to facilitate the process proactively.

Now, I’m going to explore the four steps to measure and encourage ROI.

Step 1: Identifying business pain points

The first step in a comprehensive approach to measuring ROI involves identifying the pain points within a business and converting them into tangible outcomes.

For instance, if an organization struggles with inadequate employee training, the goal might be to ensure each employee completes a certain number of hours of relevant training annually. Similarly, anticipating future challenges, such as automation, necessitates equipping employees with skills for the future, quantifiable through attaining specific badges or certifications.

Let's put this into perspective. For an organization offering learning solutions to large conglomerates, a pain point would be that the users aren't learning. The tangible outcome would be to make sure that the individual users complete 100 hours of relevant training in the whole year.

In such a case, a Customer Success Manager should identify the customer's challenges and ascertain the values that align with the customer's short and long-term expectations. As you can well imagine, a lot of roles and processes will be automated in 2025. The knock-on effect of this rise in AI will significantly alter learning and development in the workplace.

As automation becomes more prevalent, it’s understood that employees may lack the necessary skills to thrive in the new environment, leading to a skills gap within organizations. This gap not only threatens individual job security but also compromises the overall competitiveness and adaptability of businesses.

What does this mean? We expect that there will be core skills that are missing in the organization, due to the increased reliance on automated tasks. For organizations that offer learning management systems and/or content to businesses, this could be a significant challenge for the customers. The question on the tip of our tongues is: How do we convert this knowledge gap, this challenge, into a tangible outcome?

One key outcome for this company would be that every learner has at least three skills under their belt.

Step 2: Translating product features into value

The second step for CSMs is translating the features and functionality of the product into clear value propositions that directly impact the business. This could apply to any industry or business model.

The translation process is iterative and involves continuously speaking with customers to evolve the understanding of how the product's capabilities map to their changing needs and priorities.

When customers first purchase a product, their assumptions and goals can be quite different from once they've gained deeper familiarity. Priorities often shift, leadership changes, and organizational objectives get updated.

Value mapping is about consistently revisiting and fine-tuning how the product's features solve the customer's core problems and advance their strategic aims. It means aligning the value proposition with both the customer's organizational goals as well as larger market dynamics.

The process involves going back to the original rationale and objectives behind the purchase. CSMs collaborate closely with internal teams like product, sales, and implementation to uncover complete insights into why the customer invested in the first place.

Armed with that context, customer success efforts can subtly steer the conversation back toward addressing those root motivations and value drivers – rather than just reacting to shifting surface-level demands that may have drifted off course.

This value translation is done by methodically listing out the product's features, benefits, and "pain relievers" to directly map how each component solves a particular business challenge.

While step one of this article looks at the pain points from the customer's perspective, step two converts the threats into opportunities by highlighting the relevant product functionality.

The goal is to keep the product's strategic contribution to advancing organizational aims at the center of the discussion. You’ll go far if you can speak your client’s language around tangible returns and tie them back to what matters most – their overall business goals.

Step 3: Quantifying the benefits

The third step is where the rubber meets the road: quantifying the real business benefits based on industry data and past experience.

This is about moving beyond theoretical discussions to put a dollar value on the advantages the product brings to the table. To truly demonstrate the return on investment, CSMs could move beyond conceptual value to attach monetary figures. This quantification means putting a specific dollar amount to the time and efficiency gains delivered by the product's impact on key tasks.

For example, let's look at onboarding time. If bringing a new customer live typically takes three months, but the product could reduce that to six weeks (a 50% decrease), there could be significant cost savings.

With such a time reduction, the company in question is cutting in half the number of work hours spent getting employees up to full productivity. Depending on the company and role, just a few thousand dollars per employee in salary costs could be saved on average through this accelerated onboarding. If 100 employees are onboarded in a given year, that's over a million dollars in cost savings attributable to the product.

But the benefits don't stop there. The same training and faster onboarding process also increases time to full productivity. New users become productive and revenue-generating up to six weeks sooner than before. For a typical salesperson, the revenue opportunities from those extra six weeks on the job could be far more than just their base salary costs during that time.

When you consider a company that hires employees expecting a five times return on their base salary through revenue production, those accelerated few weeks could drive millions more in quantifiable gains and ROI.

This kind of methodical calculation, mapping time and efficiency improvements to their direct dollar impact, is what customer success teams need to provide in collaboration with other key stakeholders. It's about articulating the precise value of how every product-enabled task and process translates into quantifiable returns for the business.

That sort of hard financial data (vs. conceptual benefits) is what executive sponsors and decision-makers prioritize. To win their buy-in and commitment, customer success efforts must put numbers behind the value.

Step 4: Hammering home the cost of inertia

The final essential step demands particular emphasis: highlighting the "price of inertia" by consolidating all the quantified benefits into one powerful picture.

At this stage, customer success teams need to pose a crucial question back to customers:

"If you choose not to fully use and invest in this product, what is the true opportunity cost to your business?"

Armed with precise figures around accelerated onboarding, productivity gains, revenue impact, and more, CSMs can now tally up the total potential savings and returns the product enables across 10, 15, or maybe 20 different areas.

What if the consolidated number is five to ten times the product cost that the customer could be leaving on the table by not taking full advantage of the technology and its impact? That's the price of inertia – the very definition of "opportunity cost."

It's about painting the big picture of the product's far-reaching ROI. It may total $1 million in onboarding savings, $5 million in productivity gains, another $5 million in increased sales output, and many more line items like that, which add up to a shockingly large figure.

Quantifying that total, consolidating all the individual task-level impacts into one overarching number, is what will really grab the attention of executive sponsors. It's what will continue driving their trust and commitment to the product long-term.

Without this level of ROI visibility, the decision-makers will likely gloss over vague benefits and instead defer to the perspectives of secondary stakeholders, who often have less of a direct stake in maximizing the full return on a major enterprise investment.

Customer success has to make a crucial decision: is the goal to retain customers through problem-solving, or by delivering value to the key stakeholders who could make strategic decisions for their organization?

Providing consolidated ROI metrics through step three and a holistic fourth step is absolutely essential for winning over the C-suite decision-makers.

Aligning with your customers’ business goals will secure long-term executive commitment to your product's value and potential. Careful, thorough demonstrations of ROI from customer success are key to retaining customers and elevating the conversation to the strategic decision-makers.

Okay, so what have we learned about ROI?

Well, for one, customer success teams must be strategic guides, illuminating the path to maximum return on investment. It's no longer enough to recite vague benefits. Instead, it would help if you had focused, recurring discussions around customer goals.

To win sustained commitment from your customers’ C-suite decision-makers, CSMs must follow a disciplined four-step process:

Identify core business challenges and convert them into measurable outcomes.
Map how product capabilities directly drive value aligned to those outcomes.
Quantify benefits in precise financial terms - time saved, costs reduced, revenue catalyzed.
Consolidate all those wins to highlight the impact of leveraging the product to its fullest potential.

That last step – highlighting the astounding opportunity cost of failing to utilize the product fully – is what will truly open eyes and secure lasting trust among executives.

Thirty, forty, or fifty million dollars could be left on the table by not maximizing ROI. Those are the compelling numbers that get people's attention. They prove the investment thesis in irrefutable financial language.

There’s no way to beat about the bush – we live in a data-driven era. Therefore, customer success lives or dies through its ability to methodically chart the journey to quantified returns.

By aligning the core product functionalities and their value to the customers’ strategic imperatives, CSMs become indispensable co-pilots guiding their customers' leadership teams toward maximizing their ROI and growth.

FAQs

Q: How often should customer success teams measure and communicate ROI?

A: ROI should be an ongoing conversation, not a one-time exercise. Customer success teams should aim to discuss the business priorities and emphasize the value proposition on a quarterly, or semi-annual basis, to ensure that the efforts are made in the right direction.

Q: How can I get started translating product features into value drivers?

A: Start by reviewing the original sales materials, implementation plans, and discussions around why the customer purchased the product. Speak with internal teams to understand the original goals and challenges. Then, systematically map each product capability to the business pain points it addresses.

Q: What if I don't have access to industry benchmarks or past data to quantify benefits?

A: Don't get discouraged. Start with logical estimates based on factors like employee salaries, revenue productivity norms, and process efficiency improvements. Make conservative assumptions, and continuously refine the numbers as you gather more data over time through the customer relationship.

Q: How do I win over executive buy-in if I'm primarily engaging with middle managers?

A: Continuously work to elevate the conversations and establish direct relationships higher in the customer organization. Enlist internal executive sponsors, leverage internal champions, and persistently demonstrate the big-picture ROI opportunity to compel leaders' attention.

Q: What if the customer seems unwilling or unable to provide the data needed to quantify benefits?

A: Acknowledge that not every customer will be prepared to share full transparency into processes, costs, and results. Start with the data you can gather, provide estimates, and treat it as an iterative process. As you build trust over time, you may gain access to deeper insights.