Marketers have many new technologies at their disposal that increase efficiency, agility and productivity, including marketing resource management
systems, but building the business case for investing in these resources can be difficult. When evaluating any new tool, marketers and business leaders need to look at ROI, but they should also consider the cost of inaction (COI), as reported recently by B2C. Measuring the cost of inaction involves quantifying the opportunity costs of continuing in the status quo, as well as engaging with internal stakeholders to gather the information you will need to create urgency for the proposed change. Here are three steps for making the case for change – and succeeding.
Three Steps to Overcoming Objections to Marketing Change
1. Ensure the costs and risks of inaction are greater than the costs and risks of changing. Marketers need to define the business challenge the marketing technology solution will address in specific cost of inaction terms such as current time spent on tactical marketing tasks or managing ad hoc customizations or personalization. Next, weigh the cost of the solution (e.g. initial investment, configuration, training) and determine what efficiencies could be gained over the status quo. If it’s costing you more not to change (or remain in the status quo), your cost of inaction could be great enough to justify changing to a marketing technology solution to help automate your tactical marketing initiatives. Quantifiable increases in productivity or marketing production volume, for example a significant increase in the number of leads that could be gained by changing your marketing technology architecture, should also be included in your cost of inaction analysis.
2. Evaluate competitive threats. Sometimes, the cost of inaction is observed in the risk, or threat, of your competitors outpacing you. In addition to keeping a close pulse on competitive activity, it’s important to stay abreast of the marketing technology solutions your competitors may be using so you don’t get left behind. If your competition is equipped to handle a higher volume of marketing activities more leanly and cost-effectively than your company, the risk of inaction could be represented by lost business or slower growth with respect to your primary competitors. Marketers should be especially mindful of new entrants to the marketplace who are often more nimble than longer established companies.
3. Consult stakeholders. The RACI model as presented in our Marketing Organizational Leadership interview with Ed Burghard is a helpful framework for identifying which internal stakeholders should be consulted in (preferably before) the marketing technology acquisition decision. These stakeholders (Responsible, Accountable, Consulted, Informed) can also help to quantify the business need for the solution you are considering in terms specific to the costs and risks of inaction. It’s equally important to consider the organizational impact of not addressing the current problem, and finally, to make sure there is a sponsor for the project to help gain buy-in at senior levels.
Making any new business case for change requires confronting the status quo, and to succeed, your analysis should demonstrate that the costs and risks of inaction considerably outweigh the proposed investment. Using the RACI model as a guide, consult with internal stakeholders to uncover how your solution addresses the current business challenge; the more emotional buy-in you are able to gain (considering the full impact of your project), the more likely you will be to gather the critical information you need to quantify the costs and risks of inaction. The bottom line: Change can be a hard sell, but the costs and risks of inaction can be used to create a bullet-proof business case for change demonstrating that your company cannot afford to remain another day in the status quo.
Marketers can be subject to the pitfall of focusing on ROI over the costs and risks of remaining in the status quo. How are you using cost of inaction (COI) to create urgency and drive marketing change?