Reduce Price Resistance by Making the ROI Case For What You Sell
Reduce Price Resistance by Making the ROI Case For What You Sell
The business case has two important components. The first of which is being able to communicate what you do in a manner that engages your prospects. The foundation for developing your business case depends on understanding and being able to communicate the answers to these questions:
-What's the business problem that you solve?
-Why should prospects hire you vs. your competitors?
-How do I know you can do what you claim?
These are the questions you need to have a good answer to before you start doing any marketing. It often isn't easy to answer these questions. If your answers are simplistic or too basic, you'll only convince people to do business with you who are already predisposed to do so. And while it's nice to have a network of these people to draw from when you start out, you'll quickly discover that in order to thrive (or even survive in these days) you're going to have to convince people to do business with you who don't know you, or aren't referred by someone in your network. Then the game changes.
The second component of developing your business case is to communicate the ROI (return on investment). However here's a problem lots of consultants and advisors face. In a typical discussion the "I", the Investment, is the only hard number that's fully discussed. Since the "I" is what it's going to cost someone to hire you, it's crucial that it not be the only number that's out on the table. The key number that needs to be discussed is the, return. That's the important number since the difference between the investment and the return is what makes hiring you economically viable. But how do we make sure that the return clients get is fully discussed?
The answer is achieved by asking a series of questions. In fact it's a series of 3 questions. Nothing complicated. If you master how to apply these three questions, you'll ensure that the ROI of your services is fully understood, and you'll find that you hear "I can't afford you" a lot less. The three questions are as follows:
-Where are you at currently?
-Where would you ideally like to be?
-What's the value of the difference?
To illustrate how this works, let me use an example of a hypothetical firm selling marketing services. The problem many companies face is that they don't have enough leads. They aren't generating enough inquirees from the right type of people. Let's see how these three questions are used to build a ROI case for this type of services.
Question ##1 might be phrased like this: "How many leads are you currently generating?" In this case they say, ""4 leads a month."
Question #2: "What would you like it to be?" In this example let's say they answer, "12 leads per month."
Question #3: "What's the value of the difference?" Now it's likely that we'll have to ask some additional questions in order to determine the value of a lead. For example, we would probably ask additional questions such as, "What's your closing ratio?" and "What's the value of a new customer?" Thus if someone said that their closing ratio was 4-to-1, and the value of a new customer was $2000, we now can do some simple math.
They've told us that they are currently generating 4 leads a month (which results in 1 sale) and they want 12 leads a month (which results in 3 sales). This means that if the marketing program is successful, they'll go from $2000 per month in revenue to $6000 per month. That's an increase of $4000 per month. If the marketing budget is $600 per month, that's over a 650% ROI. It's going to be hard for any sensible and serious prospect to say that they can't afford that investment.
Remember that if you don't get the conversation focused on the return that people get, then the only number they'll pay attention to is the investment that's required. And an investment without a return is simply a cost.
Try using these questions in your next face-to-face meeting and I think you'll be very pleased with the results that you get.
Reduce Price Resistance by Making the ROI Case For What You Sell - To learn more about this author, visit Mark Satterfield's Website.
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It's clear that marketing and selling high value services requires a different approach than selling tangibles or less expensive products. Thus, the importance of being able to make the business case for what you offer. By that I mean that since you're going to ask people to pay money for what you do, you need to develop a case for why they should do so.
The business case has two important components. The first of which is being able to communicate what you do in a manner that engages your prospects. The foundation for developing your business case depends on understanding and being able to communicate the answers to these questions:
-What's the business problem that you solve?
-Why should prospects hire you vs. your competitors?
-How do I know you can do what you claim?
These are the questions you need to have a good answer to before you start doing any marketing. It often isn't easy to answer these questions. If your answers are simplistic or too basic, you'll only convince people to do business with you who are already predisposed to do so. And while it's nice to have a network of these people to draw from when you start out, you'll quickly discover that in order to thrive (or even survive in these days) you're going to have to convince people to do business with you who don't know you, or aren't referred by someone in your network. Then the game changes.
The second component of developing your business case is to communicate the ROI (return on investment). However here's a problem lots of consultants and advisors face. In a typical discussion the "I", the Investment, is the only hard number that's fully discussed. Since the "I" is what it's going to cost someone to hire you, it's crucial that it not be the only number that's out on the table. The key number that needs to be discussed is the, return. That's the important number since the difference between the investment and the return is what makes hiring you economically viable. But how do we make sure that the return clients get is fully discussed?
The answer is achieved by asking a series of questions. In fact it's a series of 3 questions. Nothing complicated. If you master how to apply these three questions, you'll ensure that the ROI of your services is fully understood, and you'll find that you hear "I can't afford you" a lot less. The three questions are as follows:
-Where are you at currently?
-Where would you ideally like to be?
-What's the value of the difference?
To illustrate how this works, let me use an example of a hypothetical firm selling marketing services. The problem many companies face is that they don't have enough leads. They aren't generating enough inquirees from the right type of people. Let's see how these three questions are used to build a ROI case for this type of services.
Question ##1 might be phrased like this: "How many leads are you currently generating?" In this case they say, ""4 leads a month."
Question #2: "What would you like it to be?" In this example let's say they answer, "12 leads per month."
Question #3: "What's the value of the difference?" Now it's likely that we'll have to ask some additional questions in order to determine the value of a lead. For example, we would probably ask additional questions such as, "What's your closing ratio?" and "What's the value of a new customer?" Thus if someone said that their closing ratio was 4-to-1, and the value of a new customer was $2000, we now can do some simple math.
They've told us that they are currently generating 4 leads a month (which results in 1 sale) and they want 12 leads a month (which results in 3 sales). This means that if the marketing program is successful, they'll go from $2000 per month in revenue to $6000 per month. That's an increase of $4000 per month. If the marketing budget is $600 per month, that's over a 650% ROI. It's going to be hard for any sensible and serious prospect to say that they can't afford that investment.
Remember that if you don't get the conversation focused on the return that people get, then the only number they'll pay attention to is the investment that's required. And an investment without a return is simply a cost.
Try using these questions in your next face-to-face meeting and I think you'll be very pleased with the results that you get.
Reduce Price Resistance by Making the ROI Case For What You Sell - To learn more about this author, visit Mark Satterfield's Website.
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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