General Motors ran an ill-fated ad campaign in the late 80’s and early 90’s about The New Generation of Oldsmobile with a tag line “Not your Father’s Oldsmobile”*. They used hip music and video and got famous fathers like Ringo Starr, William Shatner and Leonard Nimoy with their daughters while promoting an imminently forgettable line of automobiles.
It was only about a decade later that Oldsmobile became a brand of the past.
“Dead’er than a beaver hat” I heard someone say.
NXT-GEN ROI cannot be a rehash of OLD-GEN ROI that companies have tried to use for the past 20 years. OLD-GEN ROI has the following characteristics with terrible consequences:
– Limited almost exclusively to the last ½ of a sales cycle
– Limited almost exclusively to a handful of a company’s largest deals
– Limited almost exclusively to skilled “value engineers” and “business value consultants”.
OLD-GEN ROI is like driving a 1989 Olds Calais with the terrible Quad 4 engine (oft thought to resemble Offenhauser’s design of the 1930’s) versus a brand-new, top of the line Tesla Model S.
In practice OLD-GEN ROI looks like this, limited to the bluish area in the top right. Perhaps the worst part is that OLD-GEN ROI is only practiced this “well” by about 9% of today’s companies:
The pain associated with OLD-GEN ROI is real. Low effectivity in marketing, lack of buyer connection and business alignment in early sales stages, forecasts vulnerable to losses as well as deal slippage and margin erosion for deals that are won, and churn with price pressure within the existing customer base. All because Value Selling is not a part of a company’s DNA.
Here’s what NXT-GEN ROI should look like, impacting the entire Customer Journey:
Over the next several posts, I’ll talk about the Identification, Position, Proposition and Realization impacts of NXT-GEN ROI across Marketing, Sales and Customer Care. Read here for a Harvard Business Review Study of business impact.
OLD-GEN ROI won’t go away anytime soon, but companies utilizing it will fail to achieve peak performance and be at a competitive disadvantage compared to those using NXT-GEN ROI.
*FWIW, if Olds and GM in general had stayed out front in the 80’s and 90’s with cars like the ‘58 Buick Roadmaster, ’66 Pontiac GTO, ’68 Chevy SS396 and ’72 Olds 442, they wouldn’t have gone through the 25 year hard times they did.
Is it worth it to create ROI analysis for your opportunities?
As a B2B sales professional, your decision whether or not to invest time in creating a business case depends on the amount of effort required versus your expected return. And since today’s prevailing paradigm is that creating a unique business case is a difficult task, most of your opportunities probably don’t have one.
On the other hand, your prospects have a limited amount of funds and they will (or should) only invest in those projects that promise the highest yield. They will always compare your proposal with a multitude of others, and if you do not discuss a financial justification with the decision maker then someone else will.
So how do we solve this dilemma? By disrupting the status quo and using technology to decrease the amount of effort required.
When you can generate detailed business case documents in a matter of minutes for all your opportunities, you will have better conversations at the highest levels and your close rate will increase.
The ROI of ROI then becomes undeniable.
The Heart of a Nxt-Gen ROI System – Selling Value to Existing Customers
Last post we discussed the 3 ways new opportunities get started:
1. Seller helps prospect identify need
2. Prospect identifies need on their own
3. Competition helps prospect identify need and how a Nxt-Gen ROI
system impacted all 3 in a material way.
Today the conversation is about your existing customers, specifically, keeping your customers, protecting margins, fending off competition and promoting cross-sell/up-sell.
Achieving those is the penultimate achievement of CUSTOMER CARE.
Imagine for your existing customers a scenario like this…6 months prior to a renewal, your company offers a complementary “health check-up” service. It’s short and sweet, you interview the customer staff and:
- Identify (and measure) areas of success,
- Identify areas that need improvement,
- Identify potential competitive threats, and
- Identify areas of new opportunity.
Several months before your renewal, you’ve done all of the above and provide the customer an assessment a few weeks later that lays the groundwork for your renewal.
What customer doesn’t want this kind of service from their vendors? Yet it is rarely provided. Simply put, your NxtGen-ROI system MUST facilitate this capability for your organization so that is standard practice, a part of your customer engagement DNA.
Outcomes? Lower churn rates, improved margins, and up-sell/cross-sell for more revenue.
It’s not theoretical, check out this week’s Value Selling Success Story for a prime example.
Ensuring your organization has a Nxt-Gen ROI capability unlocks the potential for all 4 ways that sales opportunities get started.
The Heart of a NXT-GEN™ ROI System – Outside-In Analysis
Supporting all Three Ways You Get Into a New Opportunity
How do our sales opportunities get started? Fundamentally there are four ways:
1. Seller helps prospect identify need
2. Prospect identifies need on their own
3. Competition helps prospect identify need
4. Existing customer is buying more
SAP is one of the best in the world at this (and with 500 specialists in their value organization, they should be). Supporting the beginning of a sales engagement is a staple for them, as it is for every sales methodology. Whether calling it outside-in analysis, Door Opener, hypothesis, Challenger, provocative, etc., it’s critical to be personalized and specific to the prospect, and differentiated with respect to competition.
Traditional ROI approaches yield little capability for initial engagement, or don’t support it at all. A NxtGen ROI™ needs to support all 4. In today’s post, I’m going to deal with new sales, numbers 1, 2 and 3. Next post, I’ll address number 4.
Whichever of the three, the “initial point of sales engagement” is critical to establishing a competitively powerful position in the prospect account. See chart below:
The old adage “you only get one chance to make a first impression” couldn’t be truer or more applicable than in our world of selling. A NxtGen ROI™ will ensure your best chance to make a great first impression…every time.
“We need a Return on Investment analysis to get our deal done.”
On the first post in this series, we premised a definition for Next Generation ROITM:
A Next Generation ROITM should communicate all facets of a seller’s value proposition, it should do so clearly and succinctly, it should involve all roles in the seller/buyer relationship, it should be available for every deal or opportunity, it should achieve scalability through automation and it should enable best practices as a matter of course.
So the first item to tackle is who? The definition says “all roles in the seller/buyer relationship”. And why not??? The one, and only, reason customers buy from sellers is to acquire some form of value. If that is the case, should anyone in the relationship not be a value practitioner? Especially the field sales team!!!
I’ve got a philosophical bent on this. The sales rep and sales support pros are the tip of the spear for selling organizations. Not only should we enable them, we should be obsessed in doing so. Unfortunately, the “ROI” conversation is too often relegated to a specialist group.
It’s no wonder that the top 15-20% of reps produce the lion’s share of the revenue. If we want to change that, we need to be obsessed about enabling the field sales team.
A favorite book of mine is Selling to the C-Suite available here. Rather than a book of sales anecdotes supporting a how to, it’s a survey of several hundred business executives, how they WANT to be sold to. The principles are common with Challenger Sale, Hypothesis selling, Provocative selling and on and on. You want high performance? This is the key and there is no question.
If your ROI capability doesn’t enable the sales team, then it’s not next generation and
that means leaving sales results, corporate results, empowered employees and satisfied
customers on the table.