This Simple Strategy Will Sell Your ROI and Value Proposition Every Time

Posted by Dave Kurlan on Mon, Mar 07, 2016 @ 06:03 AM

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Most salespeople can calculate ROI and explain it to their prospects, but many of them find it equally difficult to articulate that same ROI after they have been presented with a price objection.  They become defensive, review features and benefits, and make the situation worse for themselves instead of better.  We are going to review the case history of a salesperson who had an $85,000 solution that would increase company revenue from $10 million to $20 million.  Despite promising a $10 million gain, he was unable to overcome what he heard from his prospect:  "That's too much money!"  In this article, we willl discuss how it's done.

The prospective client had 30 outlets and needed to grow from $10 million to $20 million, the magic number for the CEO.  At $20 million, volume and pre-payment discounts would increase his bottom line by 10 points or an additional $2 million over and above what the $10 million in organic growth would produce.  $20 million was also the key milestone to sell the business to a strategic buyer and get a 10:1 return on EBITDA.  If ever there was a compelling reason to move forward, this CEO had it.  Unfortunately he was looking at the $85,000 cost as a line item rather than an investment to achieve a $10 million return. Rex, the salesperson, was unable to get him to see the $85,000 through that lens, so he turned to me for help.

I asked Rex what the prospect's average project sold for and learned that it was $35,000.

When you put that in context, that is 10 additional projects, per outlet, per year, to capture the additional $10 million.  And if we break it down even further, it's each outlet, selling just 3 additional projects, every 4 months.  At a 30% margin, it requires only 8 projects in total to break-even or 16 for a 100% return on investment.  That can be achieved when half of their outlets sell 1 additional project in a year!  So what does that tell us?

Rex never put this in context or he would have closed this in about 2 minutes flat.

It also means that the prospect had probably not done the math either.  If he had, then he was betting that Rex's solution wouldn't help half of the 30 outlets sell even one additional project over the entire year.  Rex was betting that his solution would help each of the 30 outlets sell ten additional projects over the entire year.

Articulating this particular ROI is simply about having a discussion on the point spread!

Did the prosopect think so little of the solution that he really believed it couldn't help 30 outlets capture 16 additional projects between them in a year, or did the prospect fail to do the math?

Most of the time, selling has little to do with features, benefits, products or services.  It always has a great deal to do with math - the quantification of the compelling reason to buy - in this case $10 million - and the articulation of the value proposition in the context of the prospect's real world situation - 30 outlets capturing a total of 90 additional projects between them over a year.

Selling is all about the math.

For example, the candidates in the 2016 US Presidential primaries have been presenting their plans and much of that revolves around math. I am not making a political statement here; I'm simply providing three examples of math used by the candidates in their attempts to support (or not support) their plans. The challenge for most of them is that their math doesn't always work and that leads to issues with credibilty, but not necessarily their popularity!

Bernie's plan is about free everything, but when you do the math, free will actually cost taxpayers $1.5 trillion per year.  That math doesn't work.  Donald has used the $58 billion trade deficit with Mexico to demonstrate how he will use that as leverage to get Mexico to pay for a wall.  That math works.  Ted wants a 16% flat tax.  I didn't know if that math worked, so I did some research.  I found that the total of American wages paid is around $10 trillion and the total of corporate revenue is about $16 trillion so at 16% that would generate around $4 trillion in revenue to the US Governement.  The 2016 US Federal budget is $3.5 trillion so that would leave $500 billion surplus to pay down the debt.  If that surplus could be sustained, the debt would take 36 years to pay off!  So does that math work?  Only to balance the budget.  

Learn to do the math and you'll make it so much easier for your prospects to understand your value proposition as it pertains to them.

Watch this 45-minute training video on Selling Value to capture the other pieces of the value selling puzzle.

Topics: Dave Kurlan, roi, EBITDA, building value, selling value, Donald Trump, ted cruz, bernie sanders, unique value proposition

10 Sales Competencies of Steve Jobs

Posted by Dave Kurlan on Tue, Aug 21, 2012 @ 00:08 AM

steve jobsI read the Steve Jobs biography and although he was a very talented designer, innovator and inventor, it was clear to everyone who worked with him, and even to Jobs himself at the end of his life, that he was an asshole.  A simply horrible human being.  Despite his miserable people skills, he was on a mission to design products which would change the world.  But, Steve was also a great salesperson and this article discusses ten things about Steve Jobs, the salesperson, which you might want your salespeople to emulate.

Preparation - It is well known that Steve obsessed over the most minute details of product design to assure a tremendous user experience.  But, he prepared just as much for sales calls, such as when he convinced Microsoft CEO, Bill Gates, to develop Word and Excel exclusively for the first Mac.

Determination - Jobs was so determined to get his way, make the sale and seal the deal, that he nearly always found a way.  He did not consider the possibility that he might fail.

Slide Decks - He didn't like people who hid behind their PowerPoint slides and he did not use more than a few himself.  He believed that if you knew your stuff, you didn't need PowerPoint.  He preferred to have discussions rather than slide shows.  Amen to that!

Charm - Knowing that Jobs regularly treated people so badly makes it even more incredible that he could turn on the charm when he wanted something or someone to do business with him.  Although he seemed to have no empathy for the feelings of others, he was aware of the need to develop relationships in order to sell.

Negotiation - Steve usually cut very profitable deals because he was consistently successful at getting others to want what he had.  More importantly, he always was willing to walk away and did walk if he wasn't getting his way.  He usually got his way.  There is a great story in the book about how he sold Pixar to Disney for something like 7 or 8 Billion dollars.  One of the terms of the deal was that the Pixar Management Team got to run things!

Building Value - Jobs was a master at building value.  He would talk about the individual components or features of a device and for how much they would sell if available on their own, to demonstrate the tremendous value of the device itself.

Understanding - He always knew what was important to his prospect - their compelling reason to buy - and was able to leverage it and get people excited about the opportunity to work with him.

Creating Trust - Jobs got people to believe in him and his vision.  Even when people began a meeting biased against Jobs, after they met him, talked with him and became caught up in his trance, they wanted to do business with him.

Fearless - Steve would not hesitate to call anyone, anywhere, at any time to ask for anything he wanted - and he usually wanted a lot!  He was persistent too - he didn't give up and would get others to help him connect if he couldn't get connected on his own.

Showmanship - While he was a master of all the competencies which I listed above, he was best known for and best at showmanship.  His Macworld appearances were sales showmanship at its best.  The book detailed some of those presentations along with the secrecy, preparation, practice, timing, theater and attention to detail which helped to enhance his mystique and allow him to sell millions of devices from the podium.

What can you learn from the salesperson Steve Jobs?

Topics: sales culture, Dave Kurlan, salesmanship, sales core competencies, negotiation, sales personality, sales presentations, showmanship, building value, steve jobs

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Best-Selling Author, Keynote Speaker and Sales Thought Leader.  Dave Kurlan's Understanding the Sales Force Blog earned a medal for the Top Sales & Marketing Blog award for six consecutive years. This article earned a Bronze Medal for Top Sales Blog post in 2016, this one earned a Silver medal for 2017, and this article earned Silver for 2018. Read more about Dave.

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