Reineke Reitsma of Forrester Research introduces a post by colleague Richard Evensen on why you should care about what your CFO thinks about research.
How many of you care about what your CFO thinks about research? You’re probably more concerned about how satisfied your CMO is about your work – as that’s the one you’re reporting to! However, you might want to think a bit more often about the impression your CFO has about your work. Because this person is the one that ultimately pays the bills – and if he sees your department as a cost center he will treat it as one.
Forrester is working on a series of reports that help market insights professionals understand which metrics to track for which stakeholder. My colleague Richard Evensen has identified about 140 metrics across a variety of categories. For the CFO, it’s mostly about core financial metrics for competitors as these are the basis of most executive performance assessments. Metrics like revenue, growth, margins and market share are must-have. But market insights professionals really can show their value by doing additional primary research and/or modeling to show individual business unit performance or cost items.
Need more examples? Richard shares how you can show your CFO how market insights contributes to the business in the following blog post:
Richard Evensen
Savvy market insights professionals understand that the CFO is the ultimate budget decision-maker and, as such, merits outreach by the head of market insights to show the value-add market insights provides. But does your CFO get market insights? Or does he or she see your department as a discretionary cost center? Reach out and share with him or her how market insights contributes to the business:
- Market insights influences top-line growth.By identifying client needs, competitive gaps, cross-sell correlations, and new market opportunities (among other deliverables), market insights helps the company identify and optimise revenue growth potential.
- Market insights influences bottom-line growth. By identifying lower-cost (and acceptable) ways to meet customer needs (e.g., replacing phone support with IM chat support) and by identifying better competitive delivery methods (among other deliverables), market insights helps the company reduce the cost of key functions, which improves the company’s bottom line.
- Market insights influences brand value and market cap growth.By fueling high customer satisfaction, loyalty, and willingness to recommend as well as identifying messages that help the company own high-value brand attributes (among other deliverables), market insights helps the company build its brand perception, which can fuel improvements in brand equity and market capitalisation.
Not tangible enough still for a CFO who is all about the numbers? Forrester’s reports on Monetising Market Insights and Achieving ROI-Aligned Research And High Values can help to identify and measure your value-add. Below are some real-life examples of how market insights has provided tangible and measureable improvements to the business:
- 5,000x 1-year ROI.One company conducted a study on competitive channel partner payment programs that showed how it could substantially cut payments (without giving business away to competitors) and save around $250 million per year.
- 30% lower cost of delivery.Another company did a study on nearshore delivery locations that identified talent-rich secondary cities where overhead and salary costs resulted in a 30% savings for a company that spends hundreds of millions of dollars on delivery in the region.
- 10% price (margin) increase.A study on competitive pricing at another organisation identified the potential to increase price by 10% and still maintain a competitive pricing advantage on multi-year deals worth typically between $50 million and $500 million.
Do you have a similar story to tell about the value-add of market insights? It would be very helpful to your colleagues who are looking for ways to convince their CFO that market insights contributes to the business’ financial success!
Reineke Reitsma is VP & Research Director at Forrester Research and oversees the research conducted by Forrester for Market Insights Professionals globally. On a regular basis she will present a blog post by one of the analysts on her team or herself here on a RW Connect. For more posts by Forrester’s MI analysts see: http://blogs.forrester.com/market_insights.
