You may have the coolest product on the market, but if you can’t justify ROI for your solution, sophisticated buyers won’t care one bit about your innovative functionality and exciting new features.
All too many salespeople still talk in terms of benefits and demonstrate bells and whistles. But our buyers need to know how we will improve their business results, and they want us to measure those results for them in ROI―Return on Investment.
For salespeople, the bar has been raised. You must become at least as sophisticated as your clients.
How to Measure ROI
Business results are the quantitative, measurable changes a client can expect in his business if he uses your product or service. The result is a better way of getting something done—an improvement in business process, sales, profitability, conversion rate of prospects to clients, or retention of key employees. The client can monitor and measure the business impact and will know when and what results have been achieved.
ROI compares the dollar value of business results to the investment your client makes. For example, a dollar spent on a service today will return $10 to your bottom line in one year.
What interests clients the most? Results! Why do they buy? ROI. How are we taught? Features and benefits. But these days—when everyone is slashing budgets and pinching pennies—salespeople must learn how to have an ROI discussion.
A Referral ROI Example
Let’s use referral selling as an example and calculate the ROI:
- A company has gross sales of $2,500,000.
- This company has 10 field salespeople, and the gross sales per salesperson is $250,000.
- As a result of implementing a referral-selling program, the company achieves an increase of $500,000 for the entire 10-person team.
- The new gross annual sales is $3,000,000.
- The cost of converting to referral selling (i.e., implementing a referral program for 10 salespeople) is $25,000.
- Thus, a $25,000 investment translates into a net result of $500,000 in additional revenue. That’s a 2,000-percent return on investment!
So what ROI can your clients expect? (Download your thumbnail ROI Calculator.)
It’s your job to connect the dots from the product or service you provide to actual business results, and ultimately, to ROI. If you expect your customer to figure it out for you, you can kiss the sale goodbye.
What business results can clients expect from your product or service? How do you determine ROI? And how do you communicate it to your clients to seal the deal?