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.

How to Fire an Employee

One of the most difficult tasks you will face as a business owner will be... Read More

Employee Turnover: Seven Reasons Why People Quit Their Jobs

There are many reasons why good employees quit and go to another company, perhaps even... Read More

Are You Ready to Sell Your Business

Make Sure You Understand Your Motivation for SellingAre you thinking about selling your business?This simple... Read More

The Fairness of Office Politics... Integrity and Political Motivation!

I hear many complaints daily about the "unfairness" of politics in corporate America. Employees say... Read More

Deciding What to Delegate

DECIDING WHAT TO DELEGATE: Once the benefits of delegation are established and obstacles removed, the... Read More

Plan for Business Success - 6 Reasons to Succession Plan

Succession Planning provides many valuable assets to your business. Yet it is easy to do,... Read More

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... Read More

To Thine Own Self Be True--Its Better for Business: What Arthur Andersen Would Say to His Company

As a child, you probably heard, "to thine own self be true." But what does... Read More

Do You Hear That?

I read a report in the Toronto Star stated that 70% of workplace errors happen... Read More

Problem-Solving Success Tip: Use Your Project Management Skills

Solving a big problem is a project: you're far more likely to solve it successfully... Read More

How To Own A Business... Instead Of A Job

Every business is run by someone who took on a risk with their time and... Read More

Across The Interview Table!

Job interviews are easier for the interviewer or the interviewee if you plan and prepare... Read More

Office Politics

Office politics! It's just another way of saying: "The employees are not getting along!"When so... Read More

How to Find the Right Virtual Assistant for You

If you search on Google for "virtual assistant", you'll find a ton of listings. You... Read More

Leaning Toward Change

Seduced by the publicity surrounding the impact of Lean on organizations, it's no surprise that... Read More

Quick Tip - Effective Meetings Have a Complete Agenda

Most agendas for a meeting look like this.* Budget* Payroll* Staff* Sales* VutszxtnSome people would... Read More

The Key to Successful Performance Objectives

Have you ever tried to drive somewhere without proper directions? This almost always turns out... Read More

Five Principles of Effective Communication

The problem with communication is the illusion that it has occurred. George Bernard ShawI'm sure... Read More

Increasing the Return on Your Training Investment

Insightful leaders and organizations recognize that training is a valuable tool for personal and professional... Read More

Saying ?No? Gracefully to Customers and Colleagues

Envision the scenario: You've just been asked at the last minute by Chris, the organizer... Read More

Demise of the Lone Ranger Manager: A Lesson in Management Communication Style

When executives see themselves as solely responsible for the overall success of their enterprise, subordinates... Read More

Resolve Differences

Resolving conflict doesn't come easily to too many people. Most of us want harmonious relationships... Read More

Managing Creativity

Creativity Starts Here!The ability of an organisation to create new products/services and innovate new processes... Read More

Dont Let Your Measurements Mislead You

Don't Let Your Measurements Mislead You There aren't too many words... Read More

Align The Enterprise & Make Beautiful Music Together

Q: Why is a great business like a great marching band?A: The players in both... Read More

Identifying Potential in Ourselves and Others

If there is someone nearby as you read this look in their eyes. Look closely... Read More

Management Consultants, Creativity, Innovation

Most firms have intelligent, capable, knowledgeable managers who are very good at day-to-day problem solving.... Read More

How To Decrease Profits Without Really Trying

Hurting your sales efforts can be accomplished easily with the proper guidance. The following effective... Read More

The Measurement of Manager Training

THE MEASUREMENT OF TRAINING: Evaluation is one of the most valuable - and challenging -... Read More

10 Fool Proof Ways To Intensify Your Profits

1. Create benefit intensifiers for your list of ad copy benefits. Example, The Benefit: "Save... Read More

Instantly Uncover Your Corporate Culture

Best Definition of "Corporate Culture"If you ask 10 people to define "organizational culture," you will... Read More

CEO: The Key To Fix ingThe Marketing/Sales Collaboration Problem

We all know that achieving better alignment, synergy and cooperation between company marketing and... Read More

Creativity Management - The Value of Being Prolific

When asked his secret to success, the author Graham Green said that it was down... Read More

Creating A Vision ? Bringing Your Dreams Into Reality

Do you have some goals you want to achieve or dreams you want to fulfill?... Read More

Benefits of Virtual Assistance

A virtual assistant is an individual who provides business services to other professionals. They're considered... Read More

Can A Business Still Be Profitable When People Skills Are Absent?

In our current world of rapid and amazing technological advances, many entrepreneurs have managed to... Read More

Success at Work : People Skills : Dealing with New Ideas

Re-organizing, re-engineering, re-training, down-sizing, outsourcing, changing-changing-changing. Organizations today think they need to be constantly changing... Read More

How to Coach Your Employees - 5 Simple Steps Anyone Can Do!

Want to get more from your people, but you don't know how? Are you up... Read More

The Top 10 Things They Don?t Teach You In Business School

Here are 10 subjects that academia should be teaching their students in business school:1. Generate... Read More

Its a Training Issue!

There's a common phrase used by Organizational Development and Human Resource professionals, when identifying kinks... Read More

What to Ask When You?re Invited to a Meeting

1) Where is the agenda? A meeting without an agenda is like a journey without... Read More

A Management Strategy

I witnessed some interesting behaviour from one of our premier management schools this summer. A... Read More

Well-Defined Processes ? How to Create

Interested in learning how to reduce development time, save money and stay in control? Business... Read More

A Sense of Humor in the Workplace ... Is it Me? Or, was that not funny?

When I was first initiated into Corporate America, I had a sense of humor that... Read More

Taking Care of Middle Manager Bounce Off

How many times have the management consultants been 'in' and after leaving, have left little... Read More

Marketing Miracle: Outsource Your Creative Services

The current economy is causing most companies to tighten their belts. With limited staffing and... Read More

Stomp Out Leeches In Your Company

Recently, I felt appalled to see a political candidate running on the motto of "Demand... Read More

Planning a Productive Retreat

What value is there in leadership or team-building retreats? Just consider the following. An executive... Read More

ISO 9001, What Next?

The overriding goal of ISO-14000. (History 1995)As ISO-9000 becomes a way of life for the... Read More

The Changing Boss-Secretary Relationship

THE CHANGING BOSS-SECRETARY RELATIONSHIP: Imagine a partnership at work. One member is outlining the agenda... Read More