Lay a path from your product to the customer’s desired business results
In school, just when we thought we had math all figured out, suddenly, getting the right answer wasn’t enough. You had to prove it and show your work. In business, showing customers the ROI is an extremely effective selling tool. In a survey of 120 B2B marketing and sales execs, industry-specific ROI analysis was ranked as the second most valuable sales tool, just behind case studies. Just like in school, however, the usefulness of an ROI analysis does not come from the numbers. It comes from proving they are credible.
There are three components to providing credible, tangible ROI: (a) existing customers willing to testify to the benefits they’ve received,
(b) a generalized model that explains how your product or service leads to business benefits, and
(c) the tools and expertise to apply that model to individual customer scenarios.
Whether in the form of a written case study, a simple quote, or a detailed analysis, customer testimony about quantitative improvements is indispensable to credibility. You can help ensure these testimonials support quantitative ROI claims in several ways. Understand which of the customer’s metrics your products are likely to improve, and gather baseline information at the time of the sale. If even 10 percent of closed sales generate such information, you’ll have a valuable intelligence base. Return to customers after the product has been in use, and ask for data on the same metrics. Even customers unwilling to become public references will often share data if they know it will be aggregated and used anonymously. Build such data gathering into your customer reference program (rule 19). Include quantitative metrics in the research done for every success story. Gathering metrics from existing customers will not only validate ROI claims, but also give individual sales reps great tools for repeat sales.
The second component of a credible ROI is a generalized model. This is simply the detailed, logical reasoning that lies behind your value proposition. To realistically show value, define a clear, logical path that connects the capabilities of your products or services to the customer’s business objectives. Rule 23 describes the process for defining use case-driven value stories. After you’ve tested and validated the reasoning of your value story with customers, use it as a consistent thread throughout your marketing material.
Finally, you will need to show the ROI for individual customer scenarios. This is especially important in accounts that require rigorous business cases in order to justify purchases. The paradox is that ROI tools that are sufficiently sophisticated to satisfy a detail-oriented financial buyer are often too complex for salespeople to use on their own. To develop detailed, customized business cases, you will need presales resources or specialists involved in the budget justification stage of the sales cycle. The good news is that for many deals, a detailed ROI calculator is unnecessary. Teach reps to use and adapt ROI claims to specific customer situations by defining the logical path (or “value story”) from business results to product or solution capabilities. Even simple back-of-the-envelope estimates of ROI can be sufficient once the customer has agreed with the logic of the value story and with the assumptions.
Regardless of the specific tools, supplementing value claims with clear proof is critical. Lay a path from what you’re selling to the customer’s desired business results via the metrics that are relevant to the customer’s use case.