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Thank you @Stephen Bounds. I appreciate the article and thoughts. I will review it further and give it a go. Per stage 3 or the RROI (Identify proximate goals and options to target them)
, you elude to "brainstorming ways to 'shift the needle'. Do you mean identify different KM Approaches? Do you have favorites that provide visible wins in a short period of time? Ones that would solidify executive and participant support?
And then at a higher level... What will having the RROI get me? I can see that it would get me good favor with the CFO, showing that I am calculating value. I can see how it would help me focus on perhaps only ONE of the metrics, as I prioritize my efforts. Are there other wins that I am missing?
I want to just move on and start building stuff, but I realize that there are MANY middle steps that I need to do. This feels like one that would be valuable to me, but I need clarity on how it will help.
On Wed, May 19, 2021 at 11:54 PM Stephen Bounds <km@...
Sounds like you have a perfect case for undertaking a RROI
(relative return on investment) evaluation.
From what you have said, you've already identified three key
metrics to target, each of which is a clear proxy for an ultimate
- Increased customer retention (proxy metric for increased
- Higher sales conversion rate (proxy metric for increased
- Decreased onboarding time for sales team (proxy metric for
decreased cost of sales)
To complete an RROI evaluation, the basic stages are:
- Identify ultimate goals and create a method for valuing
goal outcomes. This can be skipped, since it looks like
you have a direct revenue goal. Some organisations (eg
governments) need to assign a nominal dollar value another way,
perhaps by looking at calculating lost client productivity.
- Identify proximate goals and options to target them. You
have already identified the proximate goals, so the next step is
to brainstorm a range of ways to "shift the needle".
- Model impact of options on proximate goals. In other
words, what rate of change in proximate goals are you targeting
and how much would it cost to implement the option you've
- Model change in ultimate goals based on change in proximate
goals. For example, if your average retained customer
pays $1000 / month, a 1% increase in retention on 1000 new
customers annually is worth $120,000 a year.
- Compare benefits to costs to find the RROI of each
initiative. This is simply dividing the benefit achieved
by the cost, similar to a conventional cost-benefit analysis.
Use this rank to recommend the highest benefit:cost ratio first!
There's a fully worked example on page 5 of my KM4Dev paper about
RROI, which is freely
Executive, Information Management
M: 0401 829 096
On 20/05/2021 11:46 am, Jay Kreshel
Thanks for the reply. My boss EVP in Customer
Success works on the executive staff. His discussions with the
head of Marketing and Head of Sales. Their objectives are
Decreasing the amount of time our customers take to get value out of the application.
Minimizing the misunderstandings for the sales team
Increasing customer retention. If we can get the Customer Success team to know all of the use cases around the products, they can share the whole value around the solution, thus increasing retention.
Increasing the ramp time for sales, CS. We will increase the pace of hiring and will need to help them to know about our product & industry in as a short period of time as possible.
We have been working for the past few months on new
product releases and enablement for our customer-facing
teams. We have technology, software, processes, &
people that we have used to "appropriately" spread
knowledge to the audiences, But, to your point, we have
not been targeted in our approach. And we have not picked
that key "Pain Point" that we should start with.
Any thoughts as to which would be the highest reward
with ease of implementation? to get that Bang for our
Who’s asking you to do it? Depending on where it’s coming
from, it could reduce the emphasis placed on developing a
complete value proposition for exec staff, at least in
terms of a heavily quantifiable one.
As for your approach, I’d start by trying to understand
where the biggest gaps are that KM-type approaches might
be able to bridge. Where are places where there is the
most variance in performance among people doing similar
types of work? Which processes have high variance of
outcome? Which processes leverage the most amount of
resource, either in terms of inputs or outcomes?
By understanding this a bit more you’ll be in a good place
to identify potential pain points that KM can address, and
where the bang for KM buck is the greatest.
If you’d like to read more about his type of approach
check out this chapter I wrote on KM Lessons Learned: https://drive.google.com/file/d/0B4goA-zLqqvBZWFmNGVjZWQtZTRlMi00ZWMzLWIzNTUtNTBjZjkzMzM0Y2Y4/view?usp=drivesdk
(PS - after 20 years as a KM practitioner I retired and
now work with tech startups in the Bay Area through an
accelerator and via referrals).
+1 415 300 7457