Have you noticed how the acronym “ROI”, a term formerly reserved for the outcome of an in-depth investment analysis, has devolved to a catch-all buzzword for “value”? Seems like most every B2B sales organization these days mention “ROI value benefits” so much that it has become a waste-word along with efficiency, effectiveness and productivity.
Here’s my advice for B2B sellers selling to executive buyers: stop using the R-word (ROI) if you can’t say something more substantive and quantitative about the financial benefits of your solution. If you want to improve your relevancy and credibility with executive buyers, you better be able to engage them in a dialog about the financial impact your solution will have on their KPIs and project financial returns. This goes way beyond throwing out the ROI buzzword.
If you’re a sales professional with ROI phobia, you face a conundrum: do you take action to get better at this “financial thing”, or do you continue to ignore the proverbial elephant in the room? This decision may have far-reaching consequences and impact on your B2B sales and marketing career. Here are some links that may help you to decide to take action.
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I hope you will take specific developmental actions to improve your financial acumen selling skills. In the meantime, here are the top 10 dirty little secrets about ROI:
#1 You don’t need to be a financial expert to influence a ROI investment analysis.
#2 Your customers need help constructing a ROI investment analysis that clears their return hurdle rate.
#3 Don’t celebrate just because your ROI project return exceeds your customer’s hurdle rate.
#4 Cost reductions alone aren’t likely to generate enough financial benefits to clear the hurdle rate.
#5 “Soft” benefits (non-qualitative benefits) are ignored in a ROI financial investment analysis.
#6 The assumptions underlying an ROI investment analysis are most important, not the final answer.
#7 Executive buyers spend more time on ROI analysis at the beginning of a buying cycle versus the end of the buying cycle.
#8 Generic ROI calculators are useful to provide order-of-magnitude impact, but they are not a panacea.
#9 Net Present Value (NPV) and Internal Rate of Return (IRR) are the preferred ROI investment metrics.
#10 Expect to be challenged; it’s a normal part of the ROI financial analysis process.
These secrets can help you get started on the journey to improve your financial selling skills. Like any new skill, financial acumen selling skills improve as you take new knowledge and apply it in your everyday working life. To get started, you should ask for help from others at your company – your manager, the resourceful people in Learning & Development and the helpful associates who work in finance.
The good news is you aren’t expected to be an ROI financial expert. But you need to get better to expand your career opportunities and, most importantly, help your customers.
•Are there any other dirty little secrets about ROI?
•How do you use ROI analyses to advance your solutions?