ROI Based Marketing and Sales Strategy
ROI Based Marketing and Sales Strategy
Your company’s success could very well be dependent on your sales professionals taking the next step – from simply talking features and benefits, to making a financially viable business proposition to clients. Investing in the sales function with ROI tools and financial insight allows today’s sales professional to properly create a framework for understanding and quantifying the potential benefits your product or service can deliver. The Financial Contribution Value is the total actual value that a specific product generates for the customer’s business. This contribution value must be based on specified objectives and goals for the customer.
Determining the right metrics to conduct an ROI calculation is where the challenge really lies. Even successful sales professionals that are financially astute need proven ROI based sales tools that can show the short and long-term financial benefits of their products. It is also important to provide them with tools that allow them to individually tune the financials to meet the specific needs of each potential customer. Do your sales professionals know how to quantify the value based benefits of your product or service and do they feel comfortable answering basic business questions?
For instance do your sales professionals:
• Understand and explain ROI, NPV and other financial metrics?
• Investigate customer’s business needs and properly use the results?
• Conduct ROI analysis with “what-if” scenarios to gain customer buy-in?
• Effectively incorporate ROI analyses into presentations and proposals?
• Easily handle customer skepticism and objections (e.g., low price)?
If the answer is no to any of the above questions you should leverage the expertise of an experienced ROI professional.
Why ROI?
Return on Investment is universally accepted because it is used by decision makers, executive management, shareholders, analysts, and investors.
ROI is the benefit of an investment divided by the cost, expressed in percentage terms, over some period of time. If you only use ROI as an end result number you cheat yourself, your customer and your company because the true benefit of a sales based ROI approach goes well beyond the numerical result, and includes:
• Reducing ‘No Decisions’
• Reducing Price Discounts by Showing True Value
• Reducing Long Sales Cycles
Reducung 'No Decisions':
For one reason or another, some opportunities never seem to conclude because the customer makes no decision. One of the main reasons customers end up making no decision is that they don’t see enough of a compelling reason to act (don’t see the quantifiable value of the solution).
A study by Customer Centric Systems showed that between 60-80% of all prospect/customer losses are due to ‘No Decision.’ This is supported by the findings by Thomas & Company Inc., where the results from 707 proposals produced 30% wins, 15% losses and 55% no decision/pending. Of the ‘no decisions’ only 2% became wins (98% became losses). This means that the sales professional is spending more than 50% of the time providing a selling service to prospects that will not buy in the future.
ROI can be used to improve prospect selection and prioritization at early stages in the sales cycle to effectively eliminate the ‘no decisions’. By communicating a compelling and objective value based product or service justification, you can eliminate excuses and instead encourage customer informed decision making. What would it have been worth it to you and your organization if you could have reduced your last quarter ‘No Decision’ losses by 10%, 30% or even 65%?
Think of these as lost opportunities! Even if the sale wasn’t lost to a direct competitor, it is clear that these potential customers made another decision and invested their money elsewhere. Customers don’t sit on money, they invest budgeted money to get a return on their investment and if you don’t show them a strong quantifiable value then they will spend their money with someone that does show them results.
If your company has been successful, it is because your customers have been making either an emotional purchase or they have been doing the financial valuation on their own. If this is the case you have probably already picked the low hanging fruit and getting future customers probably will not be as easy.
Reducing Price Discounts:
IDC found that early adopters of ROI selling methodology have reduced discounting by 20-30% and realized significant up-sell and cross-sell opportunities by selling on value rather than price. Think of the tactical advantage a sales professional has going into price negotiations when knowing how much his prospect will save based on the ROI. This shows your customer that your price should have little to do with costs and more to do with the value that your products and services deliver. The customer is less likely to ask for a discount, and the sales professional is less likely to feel they need to give one.
Reducing Long Sales Cycles:
A recent IDC study found that “on average the sales cycle is reduced 30-40% with ROI-based selling.” Clearly, an ROI analysis can dramatically reduce the time and effort associated in closing the deal with a potential customer. Demonstrating the business impact of your product or service for the potential customer helps them appreciate the true value of your solution and accelerates a positive decision making process that is based on fact based information.
Proof: International Data Corporation (IDC) found that the average sales cycle for a million dollar Lotus Notes deal is 18 months. For those companies completing an ROI analysis, 65% reported their purchase process to be 6 months or less.
Additional ROI Based Benefits:
Quantifying the benefits of your product or service can make it easier for potential customers to select you and help keep everyone in their organization supporting the decision.
Eliminate entrenched vendor bias by providing financial insight that makes it easier for the potential customer to reconsider the purchase from “golf buddies” syndrome often found in decision-making.
Completing an ROI analysis insures that your discussions with the potential customer will focus on their organization’s business problem. It also guarantees that you get an appropriate understanding of their business needs and motivations. Your insight will result in them having more confidence that your product or service can help their business.
Equip Your Sales Team with ROI Tools & Training
Properly equip your sales force and watch your sales generated revenue increase. It is critical to select and implement ROI tools that are designed to highlight the business value of your product in order to be deemed meaningful by prospective customers. Prospective customers want to work with salespeople who have tools can be used to quickly simulate a range of important product influencing variables that have a business impact, such as:
- Number of records processed (productivity metric).
- Number of sales made (sales effectiveness metric).
- Length of customer support calls (customer service metric).
There are many other variables that are unique for each product and service and 95% can be quantified and used in an ROI analysis!
We suggest that you use professionals to create your ROI sales tools because a well designed ROI sales tool can be effectively used at any point in the sales cycle. Consider putting a flash based version on your website, but at least make sure that your sales professional has the tools they need to be successful. Just as important as the tools is making sure that your sales professionals are properly trained and ready to go. The future of your company is worth doing everything necessary to insure your sales professionals will be successful.
ROI Based Marketing and Sales Strategy - To learn more about this author, visit Glenn Clowney's Website.
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Over the last several years your customers have come under increasing pressure to do more with less and make purchase decisions that are heavily impacted by budgets, risk, and opportunities that are financially measured and ranked within their company. Relating potential new purchases to business objectives enables your customers to operate more efficiently with less risk, pursue new business opportunities, and create new revenue streams. There is clearly an opportunity for smart companies to jump ahead of their competition and increase revenue just by improving their ROI selling to these companies.
Your company’s success could very well be dependent on your sales professionals taking the next step – from simply talking features and benefits, to making a financially viable business proposition to clients. Investing in the sales function with ROI tools and financial insight allows today’s sales professional to properly create a framework for understanding and quantifying the potential benefits your product or service can deliver. The Financial Contribution Value is the total actual value that a specific product generates for the customer’s business. This contribution value must be based on specified objectives and goals for the customer.
Determining the right metrics to conduct an ROI calculation is where the challenge really lies. Even successful sales professionals that are financially astute need proven ROI based sales tools that can show the short and long-term financial benefits of their products. It is also important to provide them with tools that allow them to individually tune the financials to meet the specific needs of each potential customer. Do your sales professionals know how to quantify the value based benefits of your product or service and do they feel comfortable answering basic business questions?
For instance do your sales professionals:
• Understand and explain ROI, NPV and other financial metrics?
• Investigate customer’s business needs and properly use the results?
• Conduct ROI analysis with “what-if” scenarios to gain customer buy-in?
• Effectively incorporate ROI analyses into presentations and proposals?
• Easily handle customer skepticism and objections (e.g., low price)?
If the answer is no to any of the above questions you should leverage the expertise of an experienced ROI professional.
Why ROI?
Return on Investment is universally accepted because it is used by decision makers, executive management, shareholders, analysts, and investors.
ROI is the benefit of an investment divided by the cost, expressed in percentage terms, over some period of time. If you only use ROI as an end result number you cheat yourself, your customer and your company because the true benefit of a sales based ROI approach goes well beyond the numerical result, and includes:
• Reducing ‘No Decisions’
• Reducing Price Discounts by Showing True Value
• Reducing Long Sales Cycles
Reducung 'No Decisions':
For one reason or another, some opportunities never seem to conclude because the customer makes no decision. One of the main reasons customers end up making no decision is that they don’t see enough of a compelling reason to act (don’t see the quantifiable value of the solution).
A study by Customer Centric Systems showed that between 60-80% of all prospect/customer losses are due to ‘No Decision.’ This is supported by the findings by Thomas & Company Inc., where the results from 707 proposals produced 30% wins, 15% losses and 55% no decision/pending. Of the ‘no decisions’ only 2% became wins (98% became losses). This means that the sales professional is spending more than 50% of the time providing a selling service to prospects that will not buy in the future.
ROI can be used to improve prospect selection and prioritization at early stages in the sales cycle to effectively eliminate the ‘no decisions’. By communicating a compelling and objective value based product or service justification, you can eliminate excuses and instead encourage customer informed decision making. What would it have been worth it to you and your organization if you could have reduced your last quarter ‘No Decision’ losses by 10%, 30% or even 65%?
Think of these as lost opportunities! Even if the sale wasn’t lost to a direct competitor, it is clear that these potential customers made another decision and invested their money elsewhere. Customers don’t sit on money, they invest budgeted money to get a return on their investment and if you don’t show them a strong quantifiable value then they will spend their money with someone that does show them results.
If your company has been successful, it is because your customers have been making either an emotional purchase or they have been doing the financial valuation on their own. If this is the case you have probably already picked the low hanging fruit and getting future customers probably will not be as easy.
Reducing Price Discounts:
IDC found that early adopters of ROI selling methodology have reduced discounting by 20-30% and realized significant up-sell and cross-sell opportunities by selling on value rather than price. Think of the tactical advantage a sales professional has going into price negotiations when knowing how much his prospect will save based on the ROI. This shows your customer that your price should have little to do with costs and more to do with the value that your products and services deliver. The customer is less likely to ask for a discount, and the sales professional is less likely to feel they need to give one.
Reducing Long Sales Cycles:
A recent IDC study found that “on average the sales cycle is reduced 30-40% with ROI-based selling.” Clearly, an ROI analysis can dramatically reduce the time and effort associated in closing the deal with a potential customer. Demonstrating the business impact of your product or service for the potential customer helps them appreciate the true value of your solution and accelerates a positive decision making process that is based on fact based information.
Proof: International Data Corporation (IDC) found that the average sales cycle for a million dollar Lotus Notes deal is 18 months. For those companies completing an ROI analysis, 65% reported their purchase process to be 6 months or less.
Additional ROI Based Benefits:
Quantifying the benefits of your product or service can make it easier for potential customers to select you and help keep everyone in their organization supporting the decision.
Eliminate entrenched vendor bias by providing financial insight that makes it easier for the potential customer to reconsider the purchase from “golf buddies” syndrome often found in decision-making.
Completing an ROI analysis insures that your discussions with the potential customer will focus on their organization’s business problem. It also guarantees that you get an appropriate understanding of their business needs and motivations. Your insight will result in them having more confidence that your product or service can help their business.
Equip Your Sales Team with ROI Tools & Training
Properly equip your sales force and watch your sales generated revenue increase. It is critical to select and implement ROI tools that are designed to highlight the business value of your product in order to be deemed meaningful by prospective customers. Prospective customers want to work with salespeople who have tools can be used to quickly simulate a range of important product influencing variables that have a business impact, such as:
- Number of records processed (productivity metric).
- Number of sales made (sales effectiveness metric).
- Length of customer support calls (customer service metric).
There are many other variables that are unique for each product and service and 95% can be quantified and used in an ROI analysis!
We suggest that you use professionals to create your ROI sales tools because a well designed ROI sales tool can be effectively used at any point in the sales cycle. Consider putting a flash based version on your website, but at least make sure that your sales professional has the tools they need to be successful. Just as important as the tools is making sure that your sales professionals are properly trained and ready to go. The future of your company is worth doing everything necessary to insure your sales professionals will be successful.
ROI Based Marketing and Sales Strategy - To learn more about this author, visit Glenn Clowney'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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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan'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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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig'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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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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