| |
| |
|
Management Information |
|
|
|
Think Twice Before Selling ROI
When we're selling to business people, our value proposition has to show a good return. Solid, credible Return On Investment (ROI) calculations are supposed to prove this for us. But if we don't think twice, calculating ROI can sabotage our sale. Lots has been written about various ROI methods -- return on assets, net present value, months to break even -- and I'm not knocking any of them here. Use the one that serves your customer and your purposes best. Create the financial model that shows your offering is indeed a good investment, far exceeding your prospect's hurdle rate. But don't stop there. If your prospect decides your figures are believable and accepts your argument as valid, that may or may not be good news for you. Here's the rub; the effort and energy you have expanded to extract relevant figures, analyze them, put them into a presentation, and then "sell" them to your prospect may have helped your competitor more than you! Once your prospect accepts your ROI arguments, their conclusion is not what you might think. You may be assuming they will now feel justified in buying your offering. In reality, their conclusion is that several solutions like yours probably all make financial sense. They are now ready to buy - as soon as they know they are getting a fair price. Now that you've done all the hard work and convinced them to buy something, it's time for them to compare your offer to the competition's. You better think twice before you induce them to do that! Here is how you can "think twice" and resolve the vulnerability you have created for yourself. Think first about preparing an ROI presentation based on common, generic aspects associated with your category of solution. Get the prospect to understand the financial benefits of investing in a solution like yours. As before, use convincing, relevant, proven data so they can fully accept the financial benefits as real and attainable. Now it's time to "think twice." Consider each of your competitive advantages and build separate ROI models to quantify the advantages of each. This is your chance to attach a figure to your differential advantage. A software company used this approach to justify the perceived expense of their system to business executives. Their presentation on common benefits demonstrated a solid ROI that would get the executives' attention. Next, the salesperson would present additional ROI calculations that quantified the value of their seven unique system attributes. This second ROI layer improved financial returns by almost 30 percent. Their software package was far from the cheapest, but nowhere near 30% more than any of their competitors. As a result, buyers rarely found reason to shop around. Thinking twice can earn you higher margins and a shorter sales cycle. You will avoid pushing prospects into the arms of your competitors. Plus, you will finally be able to quantify and capture the value in your differential advantage. Give your ROI presentation a second effort, and you'll jump from sabotaging your sale to securing it. © 2005 Paul Johnson. All rights reserved. Note: This article is available for reprint at no charge. We only ask that you include our copyright notice in your reprint, along with the About the Author (byline) information we provide at the end of the article. Paul Johnson of Panache and Systems LLC consults and speaks on business strategy for systematically boosting sales performance using Shortcuts to Yes?. Check out more salesforce development tips at http://panache-yes.com/tips.html. Call Paul direct in Atlanta, Georgia, USA at (770) 271-7719.
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Business Innovation - Organizational Structure Creativity can be defined as problem identification and idea generation whilst innovation can be defined as idea selection, development and commercialisation.There are other useful definitions in this field, for example, creativity can be defined as consisting of a number of ideas, a number of diverse ideas and a number of novel ideas. Giving a Good Appraisal Interview Although this performance discussion is an opportunity for you to discuss your employee's work during a given period of time, it is also, and importantly, a time for you and your employee to check perceptions and reach mutual understandings and agreements about the purposes and priorities of their jobs. This discussion can positively influence your mutual working relationship. Accountability Equals Meeting Success Leslie was the new manager of the group. She was replacing Tom, a well respected manager who was retiring. Project Management - I Want It ALL The knee-jerk response to prioritizing requirements is to mark everything as a must-have . "I need everything before the product becomes generally available. Meaningful Diversity: Creating Cultures of Inclusion In the fitness room the other day, I caught a glimpse of a movie trailer on television. A father spoke very open-heartedly with his son about his work as a fireman. How to Delegate Effectively ACCOUNTABILITY: Delegation is not complete unless subordinates are held accountable for their work. They should be accountable to only one person-usually their immediate manager-and must understand what criteria will be used in judging their performance. Are You Measuring Something Meaningful? Avoiding inert measures that anaesthetise your performance management.INTRODUCTIONYou sit before the monthly report, which might be an inch or so thick, and you contemplate whether it's the best use of your time to paw through the pages to check if there's anything useful in there for you. Factoring Financing: How to Grow Your Business Without Debt or Loans What is factoring?Accounts receivable financing, also known as factoring, is a powerful financial tool that has fueled the growth and success of a number of companies. Factoring enables companies to capitalize on their unpaid receivables by selling them to a factoring company for immediate payment. Effective Meetings by Phone - Part 2, How to Hold a Teleconference Even a well-planned teleconference can go poorly. Some people treat any meeting as a casual social activity instead of as a serious business project. Do You Really Care What People Think? You had better care! Because what people think usually leads to predictable behaviors that can really affect your business, non-profit or association for better or worse.Look at your employees. Supplier Sees 53% Reduction in Out-of-Spec Orders Case Study The goal of perfection is a challenge. It is often viewed as an expensive process requiring large investments. Oasis in a Cash Flow Desert - Four Resources That Increase Small Business Capital Streams For small business owners, an enthusiastic vision for smooth, steady growth can become nothing more than a mirage once company cash flow problems begin to heat up. Most will struggle with the timing of payment from clients or customers at some point, all while attempting to pay their own bills in a timely fashion. Goodwill is an Intangible Asset 'Goodwill' is regarded as an intangible asset in a business. Goodwill carries a value over and above the tangible assets of a business, and representing all benefits derived from the distinctive location, trade and brand names, credit rating, reputation, cusotmers and patronage of the business. Contract Management Software: the Solution to the Problem of Coordination Charles Petrie, from Stanford, released a short article entitled "The Problem of Coordination," which highlights 4 categories in which businesses find it difficult to connect:InteroperabilityAgent Communication Semantic Unification CoordinationThough this article refers to a specific type of business, its principles are just as applicable to any business, especially when collaborating on a contract. Contract collaboration and management is difficult in any business, and the negotiations can go on for weeks, months, or even years. How to Enhance Quality in Your Business Every business must strive to provide quality products and services to customers. To achieve that objective the company must draw well thought out policies and procedures to ensure 100% achievement of the targets. Quick Tip - Effective Meetings Earn a Profit Most people treat meetings as a free resource that can be used to deal with any issue. As a result, huge amounts of time and money are wasted on trivia. What Every HR Manager Should Know About Hiring Productive Employees The characteristics of job applicants have a strong influence on whether or not they get hired. Their characteristics also indicate the level of their productivity. Bye-Bye Boring Meetings! Make Yours Remarkable! It's the middle of the night. You've woken up with a brilliant idea on how to improve the way your business product is delivered to your customers. Competion or Cooperation? It has been said, there is no better way to hone your skills and improve your performance, than competition. Competing with others, or even with your self, fosters continued improvement, striving for even higher goals, and an ongoing sense of achievement. Hire Winners: Avoid These 10 Interview No-No's Have you ever hired someone who did not live up to expectations? I'm sure many of us have at one time. The purpose of the interview is to obtain good information about an applicant to make a wise selection decision.
|
| home | site map |
| © 2006 |
