Michael Farber, the founder of the ROI Shop, recently joined our Scaling Presales webinar series to talk about how to lead productive ROI conversations with customers. Watch the full webinar here: Master the ROI Calculation to Enable Buyers, and check out the Consensus ROI calculator here.
A lot of AEs still fall back onto selling features. In the past 20 years, literally thousands of books and research papers have been written to show that leading with value and impact far outweighs any pitch that’s feature-centric.
In the 2017 DemandGen Report, 89% of buyers said that winning vendors “provided content that made it easier to show ROI…or build a business case for the purchase.” Gartner lists value assessment tools in the top three marketing tools prospective buyers want to see.
“The goal of an ROI calculator is to show your prospects what their current state is, uncover their problems, uncover their pains, and then figure out what those problems are costing them…Companies focus more on beating their competition than focusing on their biggest competitor – doing nothing.”
It comes down to overcoming buyer indecision, or inertia, and if you want to cut through it, focus on selling value.
“One of the key reasons that most of your deals will end in a ‘No’ decision is because your reps aren’t even addressing why those companies are making a purchasing decision.” You can simplify their decision down to two things: Your solution will either make them money or save them money.
Because really, that’s all they care about. They don’t care about your proposed solution; they care about the value your solution brings. Most sales reps do not engage in these financial discussions during the sales process, leading to indecision or disinterest in your solution.
ROI calculators are often outdated and confusing for both buyers and sales reps to understand. It makes it impossible for sellers to engage in productive financial discussions and to quantify the cost of the buyers’ current problems. “If your rep can’t do it (which is their full time job), how can you expect your champion to do it, who has a full-time job, probably multitasking during half your conversations?”
When buyers don’t understand the impact of what you are offering, they would prefer to do nothing than go through a costly implementation. Getting the average buying group to decide without a solid business case is extremely difficult in the best of times. “With the number of stakeholders increasing, getting them all on the same page without a solid business case is like herding cats.”
A sales process without built-in ROI may look something like this:
When the prospective buyer goes silent, you are left wondering what happened. From your side, everything looked great.
Here’s what should have happened. Instead of rushing to demo features,you should have worked with the buyer to calculate how much those problems are costing. “Most salespeople will never engage in these types of financial discussions.”
If you’re not working with your prospect to calculate how much their pain is costing them, you’re missing out on the outcome that the customer actually cares about. “This is where the value in your solution lives.”This is how you help the buyer fully understand the financial importance of moving forward with your solution.
It takes a little extra time to help potential buyers calculate how much their problems are costing, but here’s why it’s worth it:
Your ROI calculator should give your sales team an easy way to initiate those critical financial discussions. If it’s complicated, they won’t use it. And what’s worse, the buyer won’t understand or trust it.
It should also arm your champion to sell the solution internally. You can’t leave it up to the champions to quantify your benefits, they don’t have the training to speak about your solution’s value properly. “How can you expect your champion to go back to those eight or twelve stakeholders and quantify your value? Impossible. They will fail.”
Your ROI calculator should have several common value buckets that can be easily explained to your customer. Take time to label the more general areas of value your solution provides to most of your customers.
Then, have your reps find out what areas are most important to this particular buyer. Build the ROI with them so they can see the ROI calculation is real time. You can use automated sales demos to support your claims and discover what aspects of ROI are most important to your customer. The demos can even explain the ROI for you.
According to Gartner, the likelihood that a buying group purchases drops each time the group adds a stakeholder. Your goal is to combat the indecision that a buying group is heading towards and show them the value of your proposed solution.
You can do this by having critical financial conversations and discussing the buying group’s current and desired ROI. The value of your solution lives in the middle of their current and future state. “You want to show them where they currently stand, and if they move forward with you, what that future state would look like.”You need to show them how good their ROI could be if they move forward with you, enabling them to make an informed buying decision.
