How to Calculate Product Information Management Software ROI
Salsify | August 21, 2017
Many companies, especially among those that have been around for a while, still struggle with decentralized, irregular means of managing product information. Updates can be slow to propagate across the stores of information maintained by different departments, leading to friction, inefficiency, and miscommunication. More than half of the brands we surveyed report there is room for improvement in their in-house product content process. Often, getting the resources you need requires you build a strong business case.
Even the simplest PIM software can contribute to success by enabling:
- Centralization: With a PIM system in place, there is always a single, canonical repository of product information for every department to refer to, update, and respect.
- Synchronization: Given that a single system has been designated as the sole storehouse for product information, concerns about the propagation of updates or temporal conflicts can be ruled out.
- Standardization: A centralized PIM system can enforce restrictions and standards on the types, quality, and format of the product information it stores and manages.
- Deduplication: Having all product information stored and managed centrally allows for the automatic identification and pruning of redundant records and other means of cutting out bloat.
- Internationalization: A capable PIM solution makes it much easier to track and update translations and other information-related requirements of doing business internationally, as so many companies today do.
Drive significant ROI with the right technology
When traditional product information management functions are used in tandem with capabilities like digital asset management (DAM), analytics, and syndication. Here are the capabilities you should look at from any product information management system you invest in:
- Decrease rates of product return: A 2015 survey conducted by the National Retail Federation found that product returns accounted for about 8 percent of all sales by respondents. With that figure amounting to about $260 billion in lost sales in the United States alone that year, any way of paring it down can be valuable. Keep buyers supplied with accurate, useful information and they are less likely to return product. This also means they will less frequently request expensive customer support.
- Improve sales conversion rates: Richer, more informative customer-facing content also makes sales more likely in the first place. Once again, PCM features appropriately supported by PIM capabilities can combine to convert traffic at online storefronts into sales more frequently. As Nasry Angel of Forrester Research told a seminar audience, "Customers want to be treated like celebrities," and the right software can make obliging much easier. Analytics tools that are well integrated into the same system make it easier to measure these results and to test the effects of changes that are made as more is learned about how shoppers respond.
- Speed time to market: The right blend of PIM, PCM, catalog management, and syndication functionality can also cut down greatly on the time it takes to start selling a new product. With additional sales racking up for each day a product launches earlier, returns on investment can once again be significant and relatively straightforward to measure. In addition to this most obvious of advantages, being able to put a product on sale sooner can allow a business to better exploit recent trends and developments and beat competitors to the punch.
- Reduce overhead: Talented help is expensive, and employees who are forced to spend too much time managing product information and content drag down the bottom line, as a result. PIM, PXM, and other systems that make it easier to keep all the necessary information up to date cut costs on an ongoing basis and free up valuable time for tackling more meaningful work.
In each of these situations, returns on investment can be measured in fairly direct, accurate fashion. While having access to the right PIM features will play an important role in every case, it should be clear that they are never sufficient in and of themselves. Instead, it is when PIM capabilities support other systems that they are most likely to produce the returns decision makers seek.
Because of this, it can make more sense to look past the usual PIM options and seek out a more comprehensive solution from the beginning. Instead of worrying about how a PIM will integrate with a separate PXM or syndication tool, starting with a system that covers all the related needs enables greater and more reliable returns. With product experience management being such a central activity for many companies today, a PXM system that incorporates features like PIM, DAM, catalog management, analytics, and syndication often makes a perfect fit.