Have you ever used an ROI calculator to help you in a deal?
Over the last 10 years as a sales leader I’ve asked many sales reps what they think of using an ROI model to help win business and the response has usually been a negative one. Why? I’ve found it’s usually down to improper enablement and coaching.
When I say improper, I mean knowledge acquisition is one thing but the application of that knowledge requires consistent coaching to become really good at applying that knowledge. Even more so when it comes to ROI models as it’s less about the calculation and more about educating the buyer about the level of control they have to achieve their commercial objectives, by using your solution effectively and understanding the differentiating commercial value of yours v’s the competition.
Other benefits of performing ROI modelling with your buyer are;
- supporting the insight or story you’ve created for your buyer, to highlight the commercial value of making a change, now!
- as part of the evaluation process you have recommended, the ROI process will allow you to uncover stones that otherwise would be impossible to upturn - allowing you to create unique points of differentiation.
- use it as a tool to build consensus with supporting stakeholders as part of the buying process
- A tool to help you coach your buyer to build consensus with other stakeholders
- create the business justification for switching and show the justified commercial value of doing so. Obtain the budget you need to achieve your objective and not the budget to just switch. How many times have buyers allowed this to happen!
The problem with an ROI calculation is, neither the sales rep nor the buyer believes in them, why? Because the solution your buyer bought before didn’t deliver the numbers the ROI calculation forecast. It’s not the calculator that is wrong but the solution that has been bought.
- 50% of deals don’t close at all, as a result of consensus not being reached by decision making unit. This is due to either a) poor purchase criteria being defined or b) the buyer (champion or mobilisor) is too weak or does not know how to build consensus with his peers to finalise the decision.
- Of those deals where a decision is reached by the decision making unit, a large percentage, >50% have agreed on a deal that is ‘good enough’ causing a response, “we want to work with you, we think your the best but your closest competitor is half the price” causing a change in scope and an a negative affect on the forecast outcomes.
These percentages are higher when the purchase criteria has not been defined.
The ROI calculator is not just about the number.
It’s about understanding which use cases deliver commercial value and the sophistication level your client can take them by using your technology or services.
It’s about understanding the frequency in which those use cases can be implemented and optimised. And it’s about being specific about the effort or resources required to deliver each use case, to a sophistication level that will achieve ongoing differentiating value for your client. And when you think about it, this approach can apply to any technology or professional services you’re selling.
So the calculator is a means to an end, as I touched on earlier, it’s the application of the approach that delivers the impact, apply the knowledge to meet your specific objective.
So whether you use an ROI or not, it’s about how you create and build differentiating commercial value with your decision making unit that wins.
Mention the words ROI calculator to your buyer too early or out of context and you’ll lose credibility.
Here are some numbers I’ve experienced when ROI & insight is used effectively to position and maintain value through-out a deal cycle:
- 33% close rate from qualified opportunity
- 55% close rate from solution presentation
- Shorten enterprise-deal cycle by as much as 30%
- Increase deal value ARR by 50%
The number one deciding factor for winning new business is the experience your sales reps and revenue facing teams deliver to your prospects. Is your sales approach aligned to helping your buyer navigate the difficult path to purchase within their organisation? ..and is does your approach support you reps to providing a differentiating experience for your clients.
I founded Supero, a B2B Sales Consulting firm after a 30 year career in sales, 22 years in tech sales - MarTech, SalesTech, AdTech and pro-services sales. We enjoy helping MarTech businesses accelerate compound annual growth and improve profitability. We provide sales strategy, execution, training and coaching services to help enable your teams to success.
DM me on LinkedIn or Twitter: @Alex_Supero for a chat!
Follow me on Twitter: https://twitter.com/Alex_Supero
Subscribe to my YouTube channel: https://www.youtube.com/@Alex_Supero (more to come!)
Join our community Walking Digital Corridors on Guild: https://guild.co/groups/5769/walking-digital-corridors?uid=f2cc5fb136