Getting prospects to engage with ROI / TCO Analysis: It's All about the metrics
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Getting clients to believe your ROI / TCO analysis is critical to building consensus with buying committees and gaining executive approval. However, prospects often have a hard time or are reluctant to cough up the metrics you need to generate the analysis and often don’t buy into the results. Join us to learn how to overcome this engagement challenge and resolve client pushback with a metric driven approach. Improve your business value analyses, sales enablement and prospect conversations today by following this advice.
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Getting prospects to engage with ROI / TCO Analysis: It's All about the metrics
- 1. Copyright © 2001-2018 Alinean, Inc.Copyright © 2001-2018 Alinean, Inc. Get More Prospects to Engage and Convert: Its all about the Metrics 1 Dan Sixsmith, Value Consultant dsixsmith@alinean.com http://www.alinean.com @AlineanROI Tom Pisello, CEO / Founder tom@alinean.com
- 2. Copyright © 2001-2018 Alinean, Inc. You’ve implemented business value selling tools … 2 How do you avoid getting pushback from prospects when engaging with ROI? Three key challenges I need help with …
- 3. Copyright © 2001-2018 Alinean, Inc. Challenge #1: Prospects don’t have the data? 3 <10% have data needed to perform the ROI / TCO analysis Recommendation: • Default values required • All key metrics as starting point Best Practice: • Show peer benchmarks for all key metrics
- 4. Copyright © 2001-2018 Alinean, Inc. Recommendation: Populate all Key Default Values 4
- 5. Copyright © 2001-2018 Alinean, Inc. Best Practice: Show Peer Benchmarks 5 Spectrum
- 6. Copyright © 2001-2018 Alinean, Inc. Challenge #2: Data used against them? 6 Recommendation: • Pro forma analysis • Start with defaults and adjust where comfortable • Iterate to get right Best Practice: • Share the tool with prospect • Have them do the entry / work themselves Any data provided will be used to sell against me …
- 7. Copyright © 2001-2018 Alinean, Inc. Challenge #3: Don’t Always Trust the Results? 7 85% Don’t trust the vendor ROI / TCO analyses unless you do certain things right Three proven ways to boost trust
- 8. Copyright © 2001-2018 Alinean, Inc. Recommendation: Pass the Sniff Test 8 ROI 1000% 2000% 750% 500% 250% 100% 50% Reduce Business Risks Reduce Costs Grow Revenue Improve Productivity / Processes Indirect = 10-30% Direct = 100% Benefits Realization Curve Implementation Adoption & Practice Optimization
- 9. Copyright © 2001-2018 Alinean, Inc. Recommendation: Third party validation 9 3rd party research, references & tool Sources & Peer Benchmarks
- 10. Copyright © 2001-2018 Alinean, Inc. Recommendation: Success Stories for real world evidence 10 Outcome focused Personal + business value Relevancy is key Best: Bullets & summaries Include Person & Quote
- 11. Copyright © 2001-2018 Alinean, Inc. 11 How do you avoid getting pushback from prospects when engaging with ROI? Challenge #1: Prospects don’t have the data • Provide defaults for all key values • Compare with peer benchmarks Challenge #2: Think data can be used against them • Use a pro forma analysis to start • Share the tool Challenge #3: Don’t always trust the results • Results need to pass the sniff test • Validation with 3rd-party research, references & tools • Leverage success stories for real-world evidence
- 12. Copyright © 2001-2018 Alinean, Inc.Copyright © 2001-2018 Alinean, Inc. Get More Prospects to Engage and Convert: Its all about the Metrics 12 Dan Sixsmith, Value Consultant dsixsmith@alinean.com http://www.alinean.com @AlineanROI Tom Pisello, CEO / Founder tom@alinean.com
Notas del editor
- We were on a call with a value engineering leader the other day, and he was telling us how his sales reps were getting pushback from prospects when engaging with ROI. The prospects require the ROI analysis, to build consensus and elevate priority with the buying committee. And the need for financial justification is clear in order to get executive approval. However, this long time ROI expert highlighted three challenges he wanted help in overcoming to gain better adoption and selling effectiveness:
- Often key metrics you need to help the prospect understand their “do nothing” costs and to calculate potential business value impacts are not known or readily available, yet the prospect would still like to see an ROI analysis. We estimate that prospects have less than 10% of the data needed to perform an ROI analysis on-hand, and that collecting all the data can often take weeks. No-one has time for these kind of delays. Our Advice: It is key to provide prospects with a default value on all of the key metrics needed for their ROI analysis, so leveraging this as a starting point the prospect can quickly gauge their current costs and potential business value benefits with just a few easily gathered data points. From here, the sales rep can engage iteratively as needed to collect actuals and refine the analysis to the point where the prospect takes ownership and is satisfied with the integrity of the analysis results. For each default metric, we recommend providing a benchmark, particularly in a spectrum chart, visualizing the value for the leaders, laggards and peer average for each metric. This way, as the sales rep performs discovery and the prospect reviews the defaults and gathers the actual metrics, they can see how they fall versus their competitors.
- Fill in a little profile information …. Based on research, populate typical population and mixes ….. Populate resource estimates, salaries, burdened labor rates ….
- Show the metric you are collecting versus leader, laggard and peer average metrics to spur and motivate collection – guide the response to the right scope and level.
- Prospects are concerned that any data they provide to sales reps might be used against them in the selling process. Our Advice: Providing an analysis using industry average benchmark data fine tuned to match their particular size is a good starting point, so you can still produce an ROI analysis for them without them having to provide any confidential data. This pro-forma estimate may be enough for some deals, but on most others, you’ll have to do more. We suggest providing the prospect with direct access to the ROI analysis tool in order to confidentially enter their own data and perform their own analysis.
- They don’t always trust the results – Prospects often have a hard time believing the results of a vendor provided ROI analyses. In fact, less than 15% of prospects currently trust vendor provided ROI. Our Advice: There are 3 proven ways to boost the trust factor with your prospects:
- Results have to pass the “sniff test” – One of the quickest ways to loose credibility is to overstate your ROI results. An ROI of less than 500% is credible, but one of 1,000% or more certainly will bring scrutiny, and cause your sales rep to lose credibility and be on the defensive. In your ROI model, it is important to scale the results, to account for the benefits not occurring immediately, but to be less in the beginning, until adoption is achieved and processes can be optimized. Applying a realization curve can help make the results more realistic. It is also good to scale the softer, indirect benefits when compared to more tangible direct benefits. Often when downtime avoidance, boosts in user productivity or customer experience improvements are tallied, the value of these benefits can overwhelm the rest of the calculations. As every hour of downtime savings or productivity improvement, and every uptick in customer experience doesn’t always translate to a bottom-line impact, it is wise to scale these calculations by a realization factor, conservatively counting only 10-30% of what is expected (to be more conservative).
- Leverages a third party ROI tool, with third party research and references – Buyers know you are trying to sell them something. As a vendor, if you provide your own homegrown ROI tool you will automatically face more scrutiny. Instead, an ROI tool developed by a third party ROI expert firm, can help your sales reps confidently overcome this wariness. Moreover, a tool with benchmark metrics, especially those from research sources and even better, gathered directly from other client engagements, can help build confidence in the results and overcome scrutiny.
- Include success stories that show similar outcomes for like organizations – Savings claims are going to face scrutiny. If you are able to show how organizations like your prospects have achieved tangible business value benefits and ROI from the proposed solutions, your calculations will be perceived as more believable and achievable. Include tangible results, a picture of the prospect, and a quote for maximum impact.