The Problem with ROI

vs-at-nightLast year Vail and Beaver Creek started using RF scanners to check lift tickets and passes in line. I like the idea because it improves the customer experience. The RF Scanners allows lift tickets and passes to be scanned through ski jackets and clothing. It’s convenient not having to dig through your clothes looking for your pass to be scanned. Faster lift lines and less hassle in the line improves the customer experience.

It’s a good differentiator. But does it have an ROI (Return on Investment?)

I found myself asking this question after being scanned through my big puffy jacket. I can’t imagine replacing the existing scanning system with RF scanners could produce a compelling ROI. Lift lines don’t create revenue, the tickets have been purchased. The time in line, may be shortened, but not enough so that skiers would notice. So, how does a decision like this get made without a compelling ROI?

I have been part more of than my share of new idea discussions. Almost every discussion turns to ROI. It’s a fair question. An investment requires a return on that investment. The problem is, in most cases, it’s how ROI is calculated that is the problem. Far too often, companies look to calculate an immediate return. If we invest in the scanners, how much money will we make on that investment. I think this is the wrong way to look at it. I’ve watched too many great customer experience, customer focused ideas go down the crapper because a measurable ROI can’t be calculated.

Companies need to consider calculating ROI differently when it comes to customer service, customer engagement and other types of experienced based investments. They should consider aggregating a number of customer experience projects into one ROI calculation. For example, rather than trying to calculate ROI on one investment, create a budget of a number of customer experience projects and calculate a ROI on the collection of efforts. Customer service is rarely experienced via one engagement but by the collective experience. It should be measured and invested in the same way.

Does Vail and Beaver Creeks RF Scanner system create a strong ROI all by itself? I doubt it. However, when combined with the skiable terrain, the abundance of high-speed lifts, the back bowls, the outstanding service, the world class ski school it absolutely does. Vail and Beaver Creek are two of the best and most prestigious ski resorts in the world. They got this way because of decisions like putting in RF scanners

When it comes to customer experience and engagement ROI isn’t always an easy calculation. But that shouldn’t keep you from doing it. Your customers don’t care about your ROI, they care about what they get for THEIR dollar and it’s more than being scanned through their ski clothes.

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