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| Intelligent Inkjet Solutions: ROI assessments | ||
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| Posted: 12/5/2007 | ||
| Most people don't fully understand the benefit of going through the exercise of evaluating a “return on investment” scenario. ROI assessments are used in today's marketplace to fully understand the value of an investment and it is the main driver for spending money on equipment… Like the new Mutoh ValueJet! SO… you wonder… asking yourself a few important questions. Can I afford a ValueJet? How long will it take to recoup my money? What kind of volume will it take to break-even each day?
Read on…
ROI What is it?
Like any financial measurement, Return on investments exercises can be done in just about any area of business or situation when you desire knowledge about value of an investment. Whether you are measuring sales effectiveness, a stock market investment or simply finding out how long it will take to get my money back on a $14,995.00 ValueJet printer can be done easily by looking at just a few measurements. ROI's always look closely at the following; · Value · Rate of Return · Total cost of ownership · Time or Payback ROI studies are invaluable in making any capital equipment investment decision… Imagine selling 2-3x5 banners a day @ $75 ea. from a ValueJet 1204 and get a payback in just over 6 months… Keep reading So… why use them? Decision makers of companies demand proof that technology investments impact the bottom line. True…as with any money spent in today's competitive marketplace these measurements have to be calculated, re- calculated and put in to practice over time in most any business environment. Piedmont Plastics Inc. and our Digital equipment sales initiative has a unique opportunity to use this assessment as a tool to sell more printers. Did you know that an investment in an entry level Eco Solvent Inkjet printer is probably one of the quickest ROI of any capital equipment purchase in the digital output industry today? Really, How so? Before you look at the figures, let's look at a few fictional and factual realities. · Developing a ROI scenario with respect to a capital equipment investment is a joint effort between the customer and the supplier on costs and benefits in order to provide a trusted ROI. If you use hyperbole or educated guesses on how much something costs, how much it sells for and general assumptions on the market and street prices, there is no real value in the exercise. Sure it might look good on paper. But is it real? · It's not a game to produce a number. ROI exercises are about quantifying and giving substance about ongoing costs, benefits of ownership that is specific to the customer and his market climate and conditions. One ROI example might look something like this… NOTES: The following comparisons twofold, Primary calculation @ a competitive lease rate of 12% Secondary calculation @ 0%, or a cash sale or where financing is not relevant.   Click to enlarge  Click to enlarge Conclusion: So what does all this mean? Well it appears that a relatively small investment in capital equipment pays handsomely… A usable ROI illustrates exactly what the customers input was based on his business model or climate. It considers Value , Rate of Return, Total cost of Investment and Time. These are key components for consideration when looking closely at Return on Investment exercises. As a sales professional, this tool can be one of the ‘Biggest Arrows' in my Quiver ! (so to speak) It can be used in almost any situation, in any industry when you want to get answer the magic question… Why are we doing this? I have used this tool to aid in selling s many pieces of equipment. It's an easy exercise that gets you and your prospect/customer involved and committed to their business on important investment decisions. Tips to remember… · Learn to understand the value of ROI's, use them on a regular basis. · Change the variables to fit your changing market conditions · Be real, if you look at wrong data, you will get wrong results. (GIGO: garbage in, garbage out) · Apply them in every situation (personal or professional) where an investment is involved. · Always consider facts vs. fiction. Remember… In the end, numbers never lie! · Use the ROI to set new levels of performance. Look closely at what happens if you move the bar up one level; sell just one more print per day… Once you hit the breakeven point… everything else is pure profit. Available on EXCEL is a ROI template for use. | ||
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