Return on Subscription

Return on investment is most obsessive term in business world. Everyone and every where business managers develops return on investment strategy to win their ideas from top management. It make lot of sense for decision makers,venture capitalists and investment gurus, they need to know what they are investing, how much, what are their return and so on.

Here is an interesting story,a divisional manager at India's well known BPO organization,they are working for a famous telemarketing company based on U.S. Their main job is to call as many as U.S customers to tell them about various new products. Their performance is measured by how many calls they made for any given day. The manager noticed that one side(West facing) of office employes making more phone call than other side(East facing). Both the sides has same level of people, their skills and everything matched but East facing side of employes make less call than West facing side. After several rounds of research, my friend found that there is big clock on the side of high productive employees side, so he decides to buy a clock at other side also.

He wrote an email to top management to ask permission to buy a clock which costs approximately Rs 1000/- ($20). But the decision maker asked him what are the ROI points to spend money for a clock now? All he knows is, there is something with the clock that makes the difference but he doesn't know the reasons. So he dropped the plan but he hired a contractor to monitor carefully on both side of the employees. He set a date to submit the report stragery. Finally the contractor submitted the report, which has many knee jerk reaction findings. intitution

1. Most of the employees of the firm are young and they don't have habit of wearing a watch.
2. All PCs in the firm are set as U.S Eastern time,hence the employees rely on the clock to find local Indian time.
3. The low productive side employees since they don't have a clock at their side, they always uses their mobile to check the time.
4. When they check the time,they are also noticing some text messages and some missed calls.
5. They are spending some time with texting back and call back to missed calls before getting to work.

The divisional manager was happy that his intuition was perfect but he spent Rs 10,000 (~$200) to find out reasons for Return on Investment.Now he sent the email with his ROI points to buy the clock, within 5 mins he got the permission to buy the clock.

The above story is the reality that we are facing nowadays, if we want to know ROI for each and everything,we might end up spending more. But business world is not going to change any time soon. Now we are at level 3 of Return on Investment, that is Return on Subscription. What is ROS? I subscribed for WSJ for last 5 years, how do i measure my return on my subscription? Is it valid for me to find return on a service? I googled the term ROS and Return on Subscription but none were returned useful information. I thought then ROS is already measured within ROI so ROS is a nut idea.But after several thinking and reading i think i'm right, we have to measure our return of our subscription.

For example, i'm a big fan of Quicken Software , I spend yearly $70 to upgrade to next version. How do i measure my ROS for this? My thinking is, i carefully review Quicken software's feature sets, Are they providing me more and more features on each upgrade? When i bought my first Quicken on 2002 it doesn't support online transaction download, now it provides it since i feel very satisfied with my upgrades. But they didn't change anything core within software. The service and purpose remains the same but more and more features on each release made me justify my subscription. What if they didn't provide any features on each release, because Quicken 2002 is more than enough to manage my home,personal expense, why they bother about spending their resource to upgrade Quicken on every release. As i said, Return on Subscription is real, customers always checks it and if there is no upgrade, there is no sale, no profit.

Comments

sukumar said…
interesting post Subba. The story you narrate shows to what absurd levels, the discussion around ROI has been taken to.

As for Quicken, i think we can justify the ROI by looking at improved productivity.
Anonymous said…
Sorry for my bad english. Thank you so much for your good post. Your post helped me in my college assignment, If you can provide me more details please email me.
Thanks Sukumar for your comment.

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