Calculating the ROI of Investing in Band Management Software

Investing in a band management software not only takes time, but costs money and with this you want to make sure you’re seeing a positive Return On Investment (ROI).

ROI is a measure used by businesses to track the ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time) – you can learn more about this and how it works with different applications on this Investopedia article.

Ultimately we want to compare the benefits of implementing a software solution (in this case a band management software) against its costs (the monthly or yearly cost of the software licence). This will allow you to see if it’s actually worth implementing or continuing with traditional methods of managing your band.

Calculating the ROI of Band Management Software

Calculating the ROI of band management software involves comparing the upfront and ongoing costs of the software with the benefits it delivers over time. To do this you need to know some information:

Costs: List all the costs involved with the software. If they just offer a monthly, or yearly subscription, this is the cost. If there’s all addon such as customer support, or additional features you need to pay for, include this in the cost.

Time savings: This one can be a little more tricky to calculate as you may not know how much time you’ll save with a band management software. On average, our users report saving 2 hours per gig using a band manager compared to traditional methods. Use this number to calculate your time savings if you're not sure. You'll also need to convert this into your hourly rate and you’ll your monetary value e.g. (2 hours * £20/per hour = £40).

How many gigs you book a year: You’ll need to know how many gigs you, on average, book a year. If you’re not sure, use a mixture of last years numbers with this years forecast. This will allow you to calculate your total time saving in monetary value.

Redundant software: Quite often band management software will provide a whole suite of tools for you to use. From invoicing to contract creation, member management to task lists. With all these tools included in your subscription, you might be able to cancel other software subscriptions and run everything from your band manager. Include this in your calculation.

Already using a band management software and want to calculate your ROI?

If you’ve decided to adopt a band management software and you’re wanting to calculate the ROI now, you can use add the following to your calculation.

Gains: How many extra bookings have you been able to accept because of the software. This could be because of a lead capture form, or having more time to organise them.

Calculating your ROI

Once you have both the costs and benefits, calculating ROI is pretty straightforward:

1. Subtract the total costs from the total benefits (subtract the subscription cost from the time saved).
2. Divide by the costs, and multiply by 100 to get a percentage.

You’re looking for a positive ROI (a number greater than 0%) as that indicates that the software is paying off in terms of value added.

Example ROI calculation:

• Number of Gigs per Year: 50 gigs
• Time Savings: Saving 2 hours per gig at £20 per hour = £2,000
• Software Cost: £500 per year
• Replacement Savings: £200 per year (from software no longer needed)

Total Benefits: £2,000 (time savings) + £200 (replacement savings) = £2,200

Total Costs: £500 (software cost)

ROI (%) = [(£2,200 - £500) / £500] * 100 = [£1,700 / £500] * 100 = 340%

In this example, the ROI of investing in the band management software is 340%, indicating a significant positive return on investment and would be something worth considering to implement to your workflow.

Not seeing a positive ROI?

If you've done the ROI calculator and you've got a number which is less than 0%, it may indicate you're not seeing a return on your investment. This doesn't mean you have to cancel your subscription! ROI is just a number and doesn't take into account additional savings such as:

1. Piece of mind that your band manager is storing all of your gig information in a central location.
2. The ease in which band members can see gig information online in a portal.
3. The professionalism having a band manager gives you to clients and musicians.

It might also mean you're not booking enough gig per year to really see the return on investment - again, you'll have to decide if this is something you're willing to pay for to have the benefits of a band management software.

If you're already using a band management software and you see a negitive ROI, you should either contact your band manager provider and ask for training if you don't believe you're saving time, or adjust your processes to maximize the most use from the software.