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Many sales reps today rely to heavily on ROI based selling. The concept being that if one can show a company or individual a return on their invested dollars within a reasonable time frame, there should be no reason why an average sane buyer would not buy what they are selling.

However, all too often these ROI calculation is too vendor centric, and fail to engage the prospect. The result is a mathematically sound calculation, but as is the case with marketing crafted “value propositions”, they speak to the vendors’ view of the market, and their need to derive revenue from the market. They do not speak to the clients’ agenda, or move it forward, nor do they deliver value to the prospect. This type of self-serving mathematical validation ends up turning prospects off and either lengthens the sales cycle, or worse kills the sale. Again, although the typical ROI sale is rational, intellectually sound, it usually lacks the teeth to grab the customer and create either real interest or action on the part of the prospect.

This can easily be demonstrated with a specific real life example. A company I worked with had a fairly robust offering around content, content delivery and content management. Using their systems, indexing, and approach to content management they were able to deliver “relevant” content to the desktops of users “faster” and more “efficiently”. For the longest time they have sold based on an ROI with single premise originating from a claim found in an industry commissioned white paper (paraphrasing):

“The typical corporate employee spends over two hours a day searching for information”

Once they got a prospect to accept the above as “fact”, the ROI was that if they could cut down the “search time”, save each employee say 2 hours of “searching” a week, times the number of employees, time the cost per hour, times the days worked in a year, well, you’d pay for the system in no time. In fact the more you bought, the more you’d save, the quicker and the bigger the ROI. Now this company is not the only one that goes down this path, a bunch of “solution” providers do.

The maths works,

We, and as it seems many prospects, see this as flawed, and therefore not only reject the ROI proposition, but often the company and the reps presenting it; and in sales rejection is not the goal.

A solution with a price tag of $350,000, four month pay back, an ROI of 212%! Wow where do I get one?

It was amusing to watch the face of a senior executive when she was asked by a prospect CIO how she and her company can assure him that the “reclaimed time” potentially realized by their “corporate employees” would actually be put back into productive use for the company. How could he be assured that they would not go for a cigarette or surf the web.

The problem was that the ROI only related to the seller’s reality and needs. A real ROI starts and ends with the prospects view of what makes sense.

A real ROI, one with teeth, calculates a return on the clients’ objectives; measures pay back based on specific impact of changes in the clients’ interactions with their customers, speed of fulfillment, customer service response time, reduced costs, better response time, and/or increased production. All of these are real measures. All presumably identified through a process of discovery and identified by the client as not only their objective but important enough for them to want to make an investment, or just a change.

This is not to say that as sales people we can not get prospects to focus on, and buy things they did not have in mind before we engaged. By helping them discover that our product or service could in fact help them attain their goals, avoid risk, improve margins, expand markets, improve their image, and a number of other things important to them at the time. We then have to help them understand and buy in to the impact of our offering by utilizing an ROI validating their decision and creating urgency on their part to act.

As an example, when I meet with a client and we begin to discuss the quality of their sales team’s forecast, (It is worth noting that I read a study that stated the average accuracy of sales forecasts in North America is 53%), it becomes clear that the team’s inability to forecast accurately is creating havoc on the production side of the company and his margins. With better forecasting he could better predict production cycles, timing of his purchase of raw materials, ship the finished product, he could negotiate better deals with various supplier thought the whole chain. With that on the table we can begin to quantify his current costs, his potential savings and the impact for each percentage of improved forecast accuracy. Now we can have a real discussion about the real returns he could realize for every dollar he invests with us. As an added bonus to the above issue, his reps also sell better while they learn to forecast more accurately.

No BS, no Magic, just a real return based on the clients’ realities, not ours. Sure it takes a bit of effort, but it makes for a more solid sales and a more real calculation. The reality of the other type of calculation, the ones that try to rationalize the investment based on vendors’ or highly general factors, is that they really are a thinly veiled product dump. Fresh, cute, but still a dump, one that hopes that the prospects get so caught up in the numbers that they end up buying. The fact is that sometimes they do, that’s why people use it. But prospects catch on, and see that type of ROI has no teeth.

Tibor Shanto has over 20 years of sales, executive, leadership and sales operations experience in financial, information, content management and professional service industries. Prior to Renbor, Tibor Shanto spent 10 years with Dow Jones, including 5 with its subsidiary Factiva. After opening their Canadian office and building a solid team and revenue base with double digit CAGR, Mr. Shanto was appointed Sales Director for Canada and The Central USA; before leaving he also headed their Global Client Solutions organization.

As Principal of Renbor Sales Solutions Inc., Tibor works with leading corporations in Canada, USA and the UK, helping these organizations realize sustained revenue attainment through improvement in sales strategy and execution.

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Tibor Shanto tibor.shanto@sellbetter.ca
Principal, Renbor Sales Solutions Inc.
Tibor’s Blog
416 61-3555

Today’s News: I had a very long and immensely enjoyable conversation with my friend Joanne Black yesterday and she made so many interesting observations about the global economy - she really is so tuned in to what senior American commentators are predicting and, not unaturally, she has her own views, which you can listen to for free in an upcoming webcast. Here are the details:

“You can’t pick up a newspaper or magazine, listen to the radio, or view a news webpage without reading about the tribulations in the U.S. economy. It’s one piece of bad news after the next.

We need to talk-voice-to-voice-about what’s going on in our businesses and share ideas for getting through this messy time. Maybe your business is soaring! That’s terrific. How can we learn from you? Are you struggling? Let’s hear you and see if we can help.”

EVENT: Black’s Chat: The Economy & Your Business
DATE & TIME: Thursday, March 20th at 8:00 am Pacific
FORMAT: Simulcast! (Attend via Phone or Webcast — it’s your choice)

TO ATTEND THIS EVENT, CLICK THIS LINK NOW…
http://instantTeleseminar.com/?eventid=2307972

“I’m concerned. In the past few weeks, I’ve seen the “trickle-down” effect from larger economic issues.

I get concerned when I hear:

- a dressmaker say that people are altering their clothes rather than having clothes made

- a caterer who says her business is stagnant

- a consulting firm CEO who says he will be thrilled if his business is the same or even 10 percent less than last year

- an advertising executive who says that clients have cut ad budgets in half

Let’s talk. I’ve scheduled a FREE 30 minute Black’s Chat webcast on Thursday, March 20th from 8:00-8:30 a.m. PDT. I’ll bring a few tips of my own, but the focus is on you. Bring your concerns, insights, advice to the phone. It’s just 30 minutes, because none of us has a lot of time. If we can’t gain some insight in 30 minutes, we’re in the wrong place.

I want us to take action. In my last newsletter on Recession-Proof Selling, I shared this thought:

“Many people think that since there’s nothing they can do, they should just do nothing. But “nothing” is futile thinking.”

Make time in your day to talk and to succeed.
Sign up for the webcast: The Economy & Your Business

http://instantTeleseminar.com/?eventid=2307972

Joanne Black, if you needed any reminding, is America’s leading authority on referral selling and the author of the mega-selling “No More Cold Calling”

Tomorrow: Do you think that delegation is something that travels downwards? Wrong! I will be demonstrating how effective delegation really can affect your overall efficiency.

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