What is the best way to estimate the value of a customer service improvement project?

3 Estimate the costs and benefits of the project

The third step is to estimate the costs and benefits of the project using a cost-benefit analysis (CBA). CBA is a technique that compares the total costs of implementing the project with the total benefits that it will generate over time. The costs include both direct and indirect expenses, such as labor, materials, equipment, training, and overhead. The benefits include both tangible and intangible gains, such as increased sales, reduced churn, improved reputation, and enhanced customer loyalty. You should estimate the costs and benefits of the project over a specific time horizon, such as one year, three years, or five years.

4 Calculate the return on investment of the project

The fourth step is to calculate the return on investment (ROI) of the project using a simple formula. ROI is a ratio that measures the profitability of a project by dividing the net benefits by the total costs. The net benefits are the difference between the total benefits and the total costs of the project. The ROI indicates how much value the project will create for every dollar invested. For example, if the ROI of a project is 50%, it means that for every $1 spent on the project, the project will generate $1.5 in value.

5 Compare the project with alternative options

The fifth step is to compare the project with alternative options using a decision matrix. A decision matrix is a tool that helps you evaluate and prioritize different options based on multiple criteria. For example, you can compare the project with other customer service improvement projects or with doing nothing. You can assign weights and scores to each option based on the criteria that you have defined, such as cost, benefit, risk, feasibility, and alignment. The option with the highest total score is the best one to pursue.

6 Communicate the value of the project to stakeholders

The final step is to communicate the value of the project to stakeholders using a clear and concise report. Stakeholders are the people who are affected by or interested in the project, such as customers, employees, managers, investors, and partners. You should present the project scope, objectives, KPIs, costs, benefits, ROI, and comparison with alternative options in a logical and persuasive manner. You should also highlight the assumptions, limitations, and uncertainties that may affect the project value and explain how you will address them. By communicating the value of the project to stakeholders, you can gain their support and approval for the project implementation.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?