Put Your Money Where Your Mouth Is
BY JOE JACKSON
We certainly live in interesting times! Despite recent events and a
sluggish economy, businesses around the world continue to work hard and do
their part to get us back on track again. Now, more than ever, cash is
king! Surviving the times and carefully managing cash flow is on every
business principalï¿½s mind.
Gone are the days where businesses would buy your product because it
was cool and leading edge. Itï¿½s true that not many people bought based
upon those principles alone, but certainly the past few years of
prosperity showed that the return on the customerï¿½s investment was less
Today, return on investment, or ROI is ï¿½back in styleï¿½ again. Just
go take a look at the Web sites of many of the application companies in
this magazine, and in the converged space in general. Many have begun to
move their ROI story to the front of their messages.
Today, if you want a prospect to give you an appointment, you have to
lead with a solutions message, not a technology message!
- What will your product do for them to help drive new revenues and to
reduce key customer attrition?
- How fast?
- Will you guarantee your proposed ROI?
- How can they leverage the investments in their current
The ROI Is The Message
Letï¿½s face it, many business owners today are faced with how they
are going to make payroll. They are simply trying to hang on to what they
have and hope they can keep their businesses afloat until better times. It
is all but impossible to sell in todayï¿½s market without being able to
show a substantial ROI to the customer.
Here are some ideas that might help you with your ROI message:
1. Your value proposition should lead with a solution, not technology.
That is to say, donï¿½t try and justify your product with features /
bells-and-whistles. Instead, create a message that will help the prospect
visualize the financial impact associated with your product.
a. How can it help save them money?
b. How can it help them to drive new revenue into their business?
c. How can it increase customer satisfaction?
d. How can it improve quality?
e. How can it improve employee satisfaction?
2. Back in the mid 1980ï¿½s, the economy was soft, but many voice mail
/ automated attendant companies did very well by developing an ROI message
that helped prospects visualize how they could pay for the product by
displacing clerical staff and redeploying this staff to other positions
such as customer service. The ROI message was simple and effective.
3. Am I willing to put my money where my mouth is? Well, a great way to
illustrate your commitment to the proposed ROI is to back it up with a
money back guarantee.
a. Write down in a statement of work how your ROI will be measured.
b. Have the prospect agree to the measurement criteria, and
ultimately, if you can prove that the product is delivering on your ROI
commitment over a set period of time, they will pay for the product.
c. I believe that the more aggressive you are in this formula, the
shorter the sales cycle will be. An aggressive pitch; ï¿½you donï¿½t pay
anything until we prove our ROI to youï¿½ will yield a shorter sales
cycle because you are telling the prospect they have nothing to lose ï¿½
essentially try before you buy. You absorb the risk. This strategy
yields a shorter sales cycle, but the downside is high risk to your
company. Youï¿½d better do a great job as it relates to the ROI criteria
ad measurement methodology to be used. Example ROI template:
i. ROI Statement ï¿½ Increase the number of sales calls byï¿½.,
Lower your operating costs byï¿½ Increase customer satisfaction byï¿½
ii. ROI Key measure ï¿½ We will measure weekly the number of sales
calls generated, our product will help you to ramp up your call
production a minimum of ï¿½yï¿½ percent week to week for the first 90
iii. Reporting ï¿½ If your product does not have performance
reporting to support your ROI key measures, add it! Even basic
reporting will be essential in proving your point.
d. Less aggressive would be a strategy that involves recovering basic
costs only if you fail the ROI test. Things like professional services,
capital equipment, etc., may not be items that you want to expose to
such risk. In this case, the prospect absorbs these costs regardless of
the outcome, which is a fractional portion of the overall price tag.
Sharing the risk with the prospect is a sensible approach, but the
balance between their risk and your risk controls the sales cycle!
Steve Seavecki, VP of Product Management for Captaris (formerly AVT)
and I were exchanging e-mails on this subject a couple of weeks back, and
he made a point that I thought was spot on: ï¿½I see the biggest problem
with a technology vendor succeeding in todayï¿½s market is the ability to
develop a killer application. What type of application is hot right now in
the stock market? Nothing! Why, you may ask? Well, it has to do with the
fact that nobody has produced a product that goes beyond being ï¿½cool.ï¿½
Not only does a product need to be cool, it needs a ï¿½hard-ROIï¿½ so that
the corporate sponsor can justify the initial cost of the technology and
project a specific timeframe for a return on the corporate investment. In
these economic times, a hard-ROI is much more important than it was in the
go-go days of the dot-com era.ï¿½
Good luck and good selling!
Joe Jackson is managing partner of Incite Global Services; a
consulting firm that specializes in assisting communications software
companies with their strategic planning and execution. Joe has been in the
communications industry for 20 years. In marketing, and business
development. You can reach Joe at firstname.lastname@example.org.
Please visit Incite at www.inciteglobal.com.
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