Not Your Father’s ROI?

Nxt Generation ROI

 

 

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.

 

 

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The ROI OF ROI

Nxt Generation ROI

 

 

 

 

 

 

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.  DecisionLink.com

 

 

 

The Heart of a Nxt-Gen ROI System – Ashton Kutcher Visits DecisionLink

Nxt Generation ROI

 


A couple weeks ago, DecisionLink had the opportunity to spend time with Ashton Kutcher @aplusk.

A well-known actor in TV (“The 70’s Show”) and movies (“Jobs”), he is also a producer of note (“Punk’d”). More importantly to me, as   co-founder of Thorn www.wearethorn.org and supporter of many other organizations, Ashton is a powerful and committed activist in the anti-human trafficking arena, something I greatly admire.

Ashton is also a high-tech investor of note, and that was our conversation. He asked me to give our elevator pitch which went something like this:

“Buyers make purchase decisions based on business value, yet sellers are seldom able to quantify, articulate, competitively differentiate and then defend the value propositions of their proposals…research says only about 8-10% of the time. This is due to the absence of a system to enable those capabilities. The result is sub-optimal account-based marketing, low lead-to-opportunity conversions, mediocre close rates & deal values against forecasts and high customer churn. DecisionLink built the first system to automate Value Selling. Our customers like VMware, ACI, Equifax, Caterpillar, Skillsoft and more impact every area of the “Customer Journey”, Marketing, Sales and Customer Care.”

Ashton then proceeded to ask a series of insightful questions, a few went to the very heart of what we do at DecisionLink, why it matters and what our challenges are.

AK:  What do you mean by automation and “system”? How do companies do it now?

JB:  Currently this function is almost always performed by “Value Analysts”. There’s not much automation, repeatability, etc. Additionally, task complexity requires the Value Analyst’s engagement throughout the process. Think of the automobile. In 1900, there were 5000 autos in the US, hand built. With the application of automation and the production assembly line, 500,000 autos per year were being manufactured by 1915. With DecisionLink Value Cloud, our customers create 500 value props or more annually per Value Analyst versus 50-80 manually.

AK:  It sounds like you have a cookie-cutter approach. Isn’t every prospect company different?

JB:  Yeah, that’s where the auto metaphor fails. Henry Ford said you could have the Model T any color you like, as long as it’s black (laughter). Cookie-cutter doesn’t work here. The heart of Value Cloud is the first repository designed specifically for Value Objects. Those are expressions of value that ultimately have an economic result. Value Objects are multi-dimensional, for instance, the value for “labor cost” can vary from industry to industry, from use case to use case and between geographic regions. Additionally, a seller’s “competitively differentiated value” varies from competitor to competitor. Two-dimensional tabular representations don’t cut it, that’s the reason the Value Analysts will have a unique spreadsheet for every account. One of our customers estimated over 400 potential scenarios (10 industries x 5 geo’s x 4 use cases x 2 competitors). The Value Repository accommodates multiple dimensions within a single model, solving that problem. That, by the way, was a hard as heck technology to build.

AK:  Ok, but you talk about the sales reps carrying the ball instead of Value Analysts. That doesn’t seem practical. Isn’t the Value Analyst’s knowledge still needed, or are you eliminating their jobs?

JB:  Sure their knowledge is needed. In the example I cited, the knowledge from the Value Analyst and others is built into the Repository. That’s not a one-time exercise either. But to produce for a single account, the sales rep simply identifies the account, product(s) being sold, industry for the account, use case, GEO, competitor and boom…an initial estimate is produced along with sales ready assets for the rep to communicate and share with the account. Very specific for the 1 in 400 situations that account fit into. That work alone would take a Value Analyst a few days or more to produce, if it could be done at all. Back to the autos metaphor, there aren’t less mechanics today than when cars were made by hand!

AK:  But the sales rep is now going to present that? Isn’t that what the Value Analyst does?

JB:  That’s a big hurdle. We developed training and a workflow called the Value Deal Desk to make sure sales executes effectively. It’s a process. That said, every selling methodology trains sales reps to do this. Challenger, Command of the Message, Solution Selling, etc. All of them. It’s not like this is new to the sales team, they just haven’t had the content, which we give them. Back to the automobile metaphor, virtually everybody can drive because everybody has a car. With DecisionLink automation, every sales rep has a “car”, that is, value proposition content, for every account and opportunity. By the way, if the Value Analysts are now covering lots more deals. Everybody wins.

AK:  How do the customers of your customers respond?

JB:  Generally, great. Think about it. The end customer has a project under consideration. His or her project is competing for funds with many other projects. If the end customer is able to quantify, articulate and defend that project against others, the project has a better chance for funding. The CFO of one end customer said, “this is
the best business case I’ve ever seen from a vendor, it’s clear and easy to understand.” The CIO of another said, “I get it. Move the priority up and get this funded now.” A side benefit for the seller is that if an end customer won’t engage in the value conversation, there’s probably no deal there.
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There was more conversation, particularly around “account based marketing” and the ability to personalize, a really rich area of impact.

It was cool to meet Ashton and spend some time. He’s a really smart guy who had me on my toes. Very interesting that his questions were at the core of the seller:buyer dynamic, and ratified that every seller ought to be concerned and doing something about this area.

 

The Heart of a Nxt-Gen ROI System – Selling Value to Existing Customers

Nxt Generation ROIThe 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.  DecisionLink.com

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

Nxt Generation ROIThe 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 DecisionLink.comapplicable than in our world of selling. A NxtGen ROI™ will ensure your best chance to make a great first impression…every time.

The Heart of a Nxt-Gen ROI System

Nxt Generation ROIThe Heart of a Nxt-Gen ROI System – Sales Methodology Execution

Sales Methodologies. How many are there? Are they all the same, or how are they different? Most importantly,  how do you make a methodology work for your organization???

Previously I spoke to the subject of Sales Methodologies and Sales Processes. They are not the same, but they are inseparable for the high-performance sales organization.

There are myriad Sales Methodologies, each espousing certain unique aspects along with tons of commonality. George Brontén wrote a piece entitled A Brief History of Modern Sales Methodologies for Sales Leaders, and includes a really good white paper to help determine which methodology is best for you and your organization.

All interesting stuff, but my topic is about the most important question…how do you make a methodology work for your organization?

The starting point for me is what all methodologies have in common…Customer Motivation and Seller Value. We’ve visualized that in the following chart:

 

Pick your methodology (and this applies to process as well, notice MEDDIC in the list), they all expect the seller to understand and relate to Customer Motivation and articulate Seller Value specific for each buyer as it relates to that motivation. If you want your methodology to work, you must have this covered. As Al Pacino says in Scent of a Woman, “it’s non-negotiable”.

But buyers say sellers don’t do this very well.

DecisionLink.comFix this and you have a chance for your methodology to work. Don’t and you have no chance.

Ultimately, it’s a matter of acumen, ability to execute and the time it takes to execute. Nobody has 5-7 years to develop the acumen and unlimited resources to build the personalized Seller Value. That’s where Next-Gen ROI comes in. It’s the Cliff Notes path to methodology success.

If you want your Methodology to work, for your Sales Process to be successful, make sure you have a world-class capability to produce Business Value Assessments, and that BVAs are an integral part of your Methodology/Process. It’ll be the best ROI you’ll ever achieve.

“We need a Return on Investment analysis to get our deal done.”

Nxt Generation ROI“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?   DecisionLink.comThis 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.

WE NEED A RETURN ON INVESTMENT TO GET OUR DEAL DONE

Nxt Generation ROI“WE NEED A RETURN ON INVESTMENT TO GET OUR DEAL DONE”

How many times have we as sellers heard this? Too often and the situation often results in a frantic fire-drill. AND, when we don’t have a ROI, no-decision losses, competitive losses, deal slippage out of the month or quarter, excessive discounts and more.

Perhaps “maddening” is having (or not having) a rational definition for a ROI. So this series will be about Next Generation ROI™. Not just what we mean by it, but what ought to be, what it should help accomplish, who ought to be empowered by it, when and where it should be available and how it should optimally be made available.

DecisionLink.comWe’ll even deal with the “why” because that’s broader, more important and more impactful that often thought. For today, we’ll suggest a definition for the B2B sales world, and welcome comments.

A Next Generation ROI™ 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.

That’s not perfect, but it’s a start. And it’s closer than you may think.