PIM ROI is calculated to evaluate the investment made on a Product Information Management (PIM) software. It compares the cost of implementation of a PIM to the benefits that are expected to be brought by the software— like improved productivity, reduced operational costs, and enhanced customer satisfaction. 

Understanding the ROI of PIM will help you know if the investment on PIM is worth considering.

Dive in to calculate the ROI of PIM for your business and make a strategic move!

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Looking to understand how the ROI is calculated? Well, Continue reading!

What is the ROI of a PIM system?

The ROI of a PIM system can be measured from its ability to streamline your process of handling, managing, and distributing the product data. By centralizing and automating product information updates, PIM system reduces manual work, minimizes the errors, and accelerates the time to market. These efficiency gains will lead to cost savings. While better data accuracy and consistency will improve the customer satisfaction, hence more sales and eventually more revenue. 

To sum up, PIM system helps businesses save time, reduce operational costs, and boost sales by enhancing the customer experience.

How to calculate PIM ROI?

Calculating the ROI of any investment, follows a simple straight-forward equation:

ROI = (Benefit of Investment – Cost of Investment) / Cost of Investment * 100

The same applies to the PIM system as well! 

Where,

Benefit of Investment is the total value of benefits gained from the PIM system.

Cost of Investment is the total cost of acquiring, implementing, and using a PIM system.

While figuring out the cost of investment is relatively simple, it can be more complex to quantify the benefits. Try to estimate the financial impact of the benefits as accurately as possible.

KPIs to measure ROI

In order to understand the actual ROI of the PIM system, it is essential to focus on specific Key Performance Indicators (KPIs). These metrics act as the evidence of benefits, the PIM system brings.

Some essential KPIs to consider include:

Productivity Gains

Imagine you are currently spending 5 minutes per SKU, but this gets reduced to 3 minutes with PIM. For 1000 SKUs, that’s 33 hours saved — to spend on growing your business. With streamlined processes, employees can handle more products in less time, allowing them to focus on other important tasks. 

The calculator can help you estimate the time saved in these workflows, translating those hours into financial benefits.

Cost Savings

By automating the repeated tasks, PIM system reduces the cost associated with manual processes thereby minimizing the labor costs and errors. 

If you spend $15/hour for managing SKUs manually, cutting off 2 minutes per SKU could save you $500. This reduction in operating costs will eventually lead to higher profit margins. 

Input the current time spent on SKUs and labour wages associated with that, to see how much you can save!

Customer Satisfaction

Accurate Product information leads to higher customer satisfaction. Results?— repeat business and customer loyalty. Our PIM ROI calculator estimates the potential revenue increase because of enhanced customer experience.

Marketplace Expansion

A PIM system makes it easier to penetrate into new markets and sales channels by centralizing the product data in one place. Input the number of marketplaces you are planning to expand, and the calculator will help you estimate the potential increase in sales from the expansion.

Data Accuracy and Consistency

Improved data Accuracy reduces the likelihood of returns, thereby boosting the customer trust in your brand or product. This in turn will increase the product page conversion rate leading to an increase in revenue.

Even a 1% reduction in return rate across 25,000 orders with an AOV of $100 results in a $25000 increase in revenue.

Time to market

Faster product launches enable you to capture the market opportunities more quickly. It means?— more sales and more revenue.

The calculator helps you understand how much faster you can bring products to the market with a PIM system, and the expected revenue from these timely launches.

Revenue Growth

Use the calculator to figure out how better product management can contribute to an increase in your overall revenue.

Employee Satisfaction

Increased efficiency and reduced manual tasks can lead to higher employee satisfaction. While this may not be a direct financial measure, happier employees can increase productivity, hence more revenue!

Calculating the Total ROI of PIM

To effectively calculate the ROI of a PIM, you should consider both tangible and intangible benefits. Why? — each element contributes to the overall revenue. By quantifying these benefits and comparing them with the total costs, you can arrive at the potential ROI that a PIM system can bring for your business. 

A positive ROI percentage indicates a Profitable investment for your business. While a negative ROI percentage suggests a potential loss, encouraging to reevaluate your strategy.

Ultimately, calculating the ROI of a PIM is not just about numbers — with the right approach, you can make your investment become the key driver of your success!

Final Thoughts

The Global Product Information Management (PIM) market is projected to grow from $4.47 billion in 2024 to $ 20.66 billion by 2032, exhibiting a CAGR of 21.1% during the forecast period. Hence it is evident that businesses all over the world are becoming increasingly aware of PIM and started leveraging it. 

Investment in a PIM system helps in various areas of your business starting from operations to customer experience. It not only reduces your operational head aches but also paves way for revenue increase. It’s a win-win! Additionally, Choosing the right PIM is essential, as it has a great impact on your business.

Still have questions about the potential ROI of PIM for your business?

We are here to help — Book a Call with our team to get all your questions answered!

Author

Suvetha is a passionate marketing enthusiast with a knack for detail. She finds joy in the little things, whether it’s jamming to her favorite tunes or catching up with friends.