ROI: Are You Ready to Walk The Walk?
Written By: Lawson Abinanti
Published On: June 1 2004
we hit a hot button with our recent column, The
Proof is in the ROI. We heard from a number of executives at business
to business (B2B) software companies with spirited comments and questions
about using return on investment (ROI) in selling and marketing. At
the end of this column, you'll find answers to some of the questions from readers.
question that wasn't asked was "Is saving time and money a good position to
claim?" Surprised? Think about it. ROI marketing is just starting to
become mainstream. ROI selling is already out there, further advanced in adoption
because of its perceived relevance to the selling process. However,
it's used tactically rather than strategically. Sales executives call on ROI
to speed up the sales cycle and help close deals that would otherwise not close.
This may be the reason reader's questions focused on how to create an ROI sales
toolbox and what an ROI work-up costs.
A unique strategy for a while
far, ROI has not appeared as a strategic element in software marketing. It's
just another claim, sometimes emphasized in an advertisement or web seminar,
and generally somewhere down a list of product performance claims. I believe
that's about to change. In the not too distant future, we'll see a B2B software
vendor develop a positioning statement and message strategy to support a claim
such as, "XYZ product saves you more time and money" or "XYZ software gives
you a better return on your investment." Will it be a smart thing to do? The
short answer is "no" even if the company making the claim has the ROI facts
to support it.
That's because an ROI claim won't be unique for very long, and soon you're in a spitting contest. I cannot count the number of software vendors I talk to who say that the minute they start making an interesting claim, their competitor copies it. Whether that's true or just sour grapes, there's no doubt that "me too" marketing is common in B2B software and high technology in general. Current "me-too" positions in the B2B software market include
profitable business decisions"
your business your way"
customer retention and profitability"
Checklist for an ROI Strategy
it's easy to expect that after one B2B software company claims an ROI position,
others will follow (some competitors, some in other markets), and the claim
will quickly become ubiquitous instead of unique. Here's a good way to evaluate
an ROI claim, or any claim. Answer these questions to determine if it is a good
the claim believable?
Is it important?
it specific and quantifiable?
it unique and own-able? (The ideal test is that no other product can make
the same claim. A more realistic test is to determine if you are the only
company making the claim or whether it differentiates you from your major
competitor. Why do you think Burger King says its burgers are "flame broiled?")
Is it useable?
When you are the only company claiming ROI, the obvious "yes" answers to these questions tell us it's an excellent claim to make. Just prepare to be nimble. It won't be long before the claim is no longer unique; it will last three to six months, maximum. That's not long enough to establish a position, but it might give you a tactical advantage for a short period of time. It may also force competitors off a better position as they scramble to claim ROI.
ROI to Support Your Unique Claim
instead of using ROI as the claim, use it as airtight evidence to support
a unique claim that only you can make and defend. Make your ROI claim stand
out for its relevance and convincing support. Do that and you'll have a winning
message strategy for marketing, and a sales process that converts more leads
Questions and Answers—ROI Sales and Marketing Program:
How much will it cost to develop the foundation for an ROI strategy?
A really effective ROI sales and marketing project does not come cheap, because
it's hard work and the return on this investment is virtually limitless. Consulting
fees for ROI experts vary from $100 to $250 (USD) per hour. While that may seem
like a lot, it's not. Expect to spend between $35,00 and $45,000 (USD) to develop
a useful ROI sales tool (see the process below) and expect to spend $75,00 to
$100,000 (USD) for a full-blown ROI sales and marketing program.
What is the process? How long does it take?
The time between your kickoff meeting until you deploy your ROI sales tool typically
takes between eight and twelve weeks. A variety of factors can affect the length
of the project, including complexity, number of customer interviews, and team
Here are important steps in the process of developing an ROI tool:
a kickoff meeting with key players to exchange general information and confirm
that everyone shares the same understanding of the project.
Create a "straw man" value proposition, map benefits to economic needs, and
Sketch out preliminary ROI calculations for each benefit.
Conduct interviews (existing and potential customers, sales force, etc.),
validate or evolve a value proposition.
Test the economic impact of your product.
Review research findings and recommendations.
the ROI sales tool.
Conduct customer validation focus group.
Make final tweaks to the ROI sales tool; test with sales representatives and
Create a ROI sales tool user guide.
Train sales representatives.
Go live—deploy the ROI sales tool.
How to add credibility to your ROI sales program
Hiring a good ROI consulting firm will enable you to present its findings as
impartial and professionally competent. In many cases, the firm will write a
report stating its findings making it clear it stands by its reputation for
Some internally developed ROI calculators typically generate hard-to-believe cost justifications. Understandably, a prospect may simply brush them off as unrealistic, eroding your credibility instead of reinforcing it.
really good ROI consulting firm won't make a cost justification claim that can't
be supported with facts. A good firm may also tell you about clients who hired
them only to discover there was a negative ROI. It's shocking, but wouldn't
you rather have an early wake up call to go back to the product marketing drawing
board and make adjustments in price, or rethink product functionality?
What deliverables should your ROI consultant provide and what should you do
ROI value proposition and strategy formulation: Develop an
easy-to-comprehend business value proposition framework, allowing you to formulate
a unique strategy for going to market. Equip your sales representatives to effectively
and consistently communicate the tangible, economic benefits of your solution.
benchmarking research: Discover the specific, tangible, and intangible
benefits your solution brings to a customer organization, and compare this data
with industry standard benchmarks.
scenario modeling and calculator tools: Create a toolkit for your sales
representatives to use in meaningful business conversations with economic buyers
and to quantify the economic benefits of your solution in accessible, standard
financial terms—that is, the key ROI metrics.
case studies, and other support materials: Communicate ROI benefits
for your solution with white papers, contributed articles, and case studies.
and webinars: Communicate the economic value of your solution to internal
constituencies and potential customers with a credible, authoritative, and independent
sales force enablement: Educate and train sales representatives and
ROI internal champions on the strategy and benefits of incorporating ROI analysis
in their work. Train them in the techniques of using the ROI tools with customers
to win sales.
audits and performance measurement: Get critical customer feedback
and validation of your ROI methodology and document and publish the results.
Abinanti is co-founder of Messages that Matter, a consulting
firm that helps B2B software companies create compelling message strategies
that build awareness and demand. Messages that Matter gives clients
the knowledge and tools to develop powerful message strategies that differentiate
products and services from those of the competition. Lawson
has held strategic marketing positions with several B2B software companies including
Navision, Applix, TM1 Software, and Timeline. He can be reached at email@example.com.