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Impact Results

Table 11-6 shows the impact data comparing the experimental group of 25 sales associates with the control group of 22. As expected, almost every one of the control group (19 of 22) was actually selling the upgrade though not participating in the program, but the difference of the two groups was very impressive. The difference for that second month is then annualized, producing an annual improvement of $1,140,000. The time of the first sale was impressive for the group involved in the program—11 days compared to 21 days for the control group.

Table 11-6. Sales Data in Three Months After Launch

Group

Avg. Sales (Month 3)

Avg. Time to First Sale

Trial (Experimental) Group: 25 sales associates

$7,500

11 days

Comparison (Control) Group: 19 sales associates (out of 22)

$3,700

21 days

Difference =

$3,800

Annualized = $3,800 x 12 x 25 = $1,140,000

20% profit = $228,000


Comparing Data to Money

Converting data to money was easy. As outlined on the ROI analysis plan, the profit margin had to be used. This new upgrade had a predicted profit margin of 20 percent, and this value was used in the analysis. This yields a monetary value of $228,000. The time of the first sale was not converted to money, as that sale was actually already in the total sales number.

Cost

As shown in Table 11-7, the fully loaded costs were included to make the ROI calculation credible. The initial needs assessment represented very little cost, because the need was precipitated by the new product and the solution was dictated by the time and cost constraints. A charge of $3,000 was estimated for the time to pin down needs. The design and development cost was estimated to be $56,000. This amount was prorated over the evaluation for the 25 participants. To be conservative, it was assumed that half the sales team (110) would not use the program. The design and development cost per participant was $509, resulting in $12,725 for 25 participants. The project manager's time was included, as was time for participant involvement. Although many sales associates complete technology-based learning on their own time, this program was planned for use during regular work hours between calls or just before calls. In sales, work hours can be anytime. A conservative estimate was two hours per associate, recognizing that some of them completed the program on their own time. Some cost was prorated for the use of the iPad, albeit minor as the iPad is used for other purposes. An external evaluation was used in order to ensure objectivity, which created a high evaluation cost. Still, this evaluation will suffice for the entire sales force, although it's for the sample. Also, internal evaluation would have cost about $5,000. When costs and monetary benefits are combined, the benefit-cost ratio and ROI can be calculated.

Table 11-7. Costs

Needs assessment (est.)

$3,000

Design and development ($56,000/110 x 25)

$12,725

Mobile device (prorated)

$1,700

Sales associate time

$2,524

Administration time (est.)

$6,000

Project management (est.)

$14,500

Evaluation

$15,000

Total

$55,449


Exercise

1. Calculate the BCR and ROI below.

BCR =

ROI =

2. What should the approach be to communicate the results to the appropriate audiences?

Figure 11.5 shows the benefit/cost ratio and the ROI calculation. As anticipated, results exceed the ROI objective.

Figure 11-5. BCR and ROI Calculations

Intangible Benefits

In addition to the tangible sales increase converted to money, several intangibles were connected to the program, as presented in Table 11-8. Receiving the first sale within the time period is intangible, because it was not converted to money and used in the calculation (this would be double counting). In addition, the other intangibles are connected to the program as indicated on the questionnaire distributed for Level 3 data. This questionnaire contained an extra question about the extent to which this program influenced these measures. At least five participants had to rate 3 or more on a 5-point scale. There is no neutral point on a scale.

Table 11-8. Intangible Benefits

• Made the first sale in 11 days, average

• Customer satisfaction

• Brand awareness for ProfitPro

• Job satisfaction of sales associates

• Stress reduction for sales associates

• Reputation of company


 
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