December 20, 2005

7 Key Steps to Success with the ROI Sales Tool

I’ve worked in product marketing and product management for technology companies for several years now. I’ll always have to prove the ROI for a product. As a knowledge worker, you may want to check out this sales tool for yourself and see how you can adapt it to your situation. There were several key steps to success in adapting it:

1. Identify the value and pain points for your target audience so you can quantify in the ROI methodology.
2. Create histograms and pie charts for the key metrics.
3. Validate with key stakeholders in your company, especially the Control or someone in Finance.
4. Test on existing data that you may have, if not be conservative in your ROI assumptions.
5. Summarize the ROI in a presentation that allows you to show the methodology used, your approach to using the ROI, and then showing the high-level ROI metrics and results, and have an appendix so you can list the data used in the ROI.
6. Use screen shots of histograms and pie charts.
7. Summarize with the ROI Financial Dashboard, see image above; it’s compelling and the prospect loves it summarized in an easy to read format.

How I Did Find It?

There’s one thing that I’ll always be known for in my current company, the ROI Financial Dashboard sales tool. I first discovered it in a book I bought in NYC back in March 2005 called ROI Selling: Increasing Revenue, Profit, and Customer Loyalty through the 360 Sales Cycle.

I quickly adapted it for my coworker’s product when I was still a product manager at my former employer. Unfortunately, while my boss was excited about its potential, his boss pulled the plug. Fast forward to my current job as Director of Marketing, where I immediately realized that our product had tangible ROI and I couldn’t wait to adapt the ROI sales tool.

Presentation to Potential Mega Deal Prospect

Fortunately, our CTO had already development a quasi-ROI approach. Unfortunately, he couldn’t summarize his ROI Calculator data to show how the product could provide the following:

• The return on investment percentage
• The payback period
• The monthly cost to wait

That’s where I fit in. The CTO loved the ROI tool as I adapted it using his ROI Calculator, and then validated it with him. All of us (including Management Team and our Key Sales Person) were excited about the possibilities.

Our first ROI was for a major sale opportunity cultivated by Sales. In fact, you may recall, I presented my ROI to this prospect on the same day we had our first board meeting with George our lead investor. That was an awesome day. I had just presented the ROI sale tool to Mr. Investor, who immediately got it and realized we were on the right track as a Management Team and company. Then I exited this Board meeting to present my ROI presentation to a Sales’ prospect. I nailed the presentation. I was asked to run three scenarios to they could sell my ROI through their hospital committee structure. The Sales person and I knew we were on the fast track with this sales opportunity.

Signed Contract Because of ROI

While our value added reseller (VAR) or partner slowed us down in legal with our mutual prospect, we knew we had a signed contract. It was only a matter of time. The contract could eventually be a six-figure deal for us. According to the medium scenario that I had ran in the ROI analysis for the prospect, there would be a projected a six-figure estimated savings if they purchased our product. The ROI was 25% with a 9-month payback period. Not bad for investing in our product offering.

The prospect had given our Sales person verbal assurances they were going to sign with us. After waiting through November and then through this month, yesterday was the day we finally received the signed contract. I’m so proud of our Sales person for sticking with it and closing the deal. I feel great for contributing in the process with my ROI sales tool that Barbara insists got us the deal.

Recommended Book

• ROI Selling: Increasing Revenue, Profit, and Customer Loyalty through the 360 Sales Cycle by Michael Nick, Kurt Koenig

The Smart Lemming Diary is a series that chronicles a journey of laid-off worker, who becomes a Vice President of Sales Operations & Marketing for a small entrepreneurial healthcare technology company. For previous entries in this series, click here. For the first diary entry, click here. For the highlighted Smart Lemming Diary entries, click here.

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