What is ROI?
Return on investment (ROI) is a financial ratio that measures the profitability of an actual or proposed investment. ROI is a simple but effective calculation that compares profit to cost. The formula for ROI is ((Gain of Investment) – (Cost of Investment)) / (Cost of Investment). As an example, if you purchased stock for $1000 and later sold it for $1400, your ROI is (1400 – 1000) / 1000. Expressed as a percentage, your return on investment is 40%. Not bad!
Businesses often calculate ROI to determine if proposed projects will provide an acceptable payback. ROI can be applied to a wide variety of projects ranging from marketing campaigns to facilities renovations to substantial website enhancements. Additionally, ROI can used to compare options – for example, marketing campaign A versus marketing campaign B.
ROI can also be used for decisions about implementing new software. Many software selections begin with financial due diligence that may include calculating ROI and other financial ratios. When determining benefits (ie, “gain of investment”), businesses should include factors such as increased revenue and decreased costs. Cost of investment would include software and hardware expenses, as well as labor costs associated with implementation and training.
As an example, when , the “gain of investment” might include:
- Increased revenue from referrals
- Increased revenue from higher share of wallet
- Decreased customer support costs
- Decreased cost of IT support
- Decreased cost of manually compiling and analyzing data
Cloud-based solutions are typically less expensive than on-premise systems – for example, you don’t have to purchase hardware and the need for IT resources is much less. Nonetheless, there will be costs, including:
- Subscription fees
- Integration development
- Staff training
- Other implementation costs (such as staff time/wages)
About NICE Satmetrix
NICE Satmetrix is the leading global provider of Voice of the Customer (VOC) software used by the world's most forward-thinking companies to analyze and transform their customer service interactions. Our Customer Journey-based solution combines and analyzes customer interactions, solicited feedback, and operational data at enterprise scale to uncover blind spots, increase customer satisfaction and improve agent performance.
With consumers reaching out to contact centers for more reasons than ever before, providing consistent and optimized experiences is central to fostering loyalty and increasing customer lifetime value. NICE Satmetrix VOC enables businesses of all sizes to grow the value of customer service touchpoints and operationalize customer feedback.
With NICE Satmetrix VOC, the top VOC solution for contact centers, contact centers get access to:
Integrations with NICE inContact CXone and the NICE portfolio of contact center solutions
- Superior analytics
- Digital omnichannel and hassle-free IVR integrations
- Customer Journey-based design
- One-stop-shop for all your contact center VOC needs
NICE Satmetrix is the co-creator of the Net Promoter Score® (NPS®), one of the best indicators of customer loyalty and predictors of business growth. We've instilled our deep knowledge of consumer behavior into our VOC software to make NICE Satmetrix holistic VOC a true one-stop shop for Voice of the Customer with a self-service solution that meets the needs of organizations of every size.