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David Beard @ Sage CRM
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Focus on ROI: Using Financial Tools to make a compelling business case (2/2)

2 minute read time.

"IT decisions should be less about technology and more about the business capabilities the technology makes possible…for their potential to bring speed, efficiency and innovation. ROI offers a strong way to represent those ideas." — CIO Magazine http://bit.ly/1mvoD5u

In the first part of this "Focus on ROI" two-part blog series, I outlined some of the psychology behind "no decision". These justifications frequently torpedo even the best-planned and executed sales pitches.

One of the most effective ways to counter this, or to engage other "blockers" in the target company, is by using the power of numbers: a well thought-out, logical and co-created Return-on-Investment proposition.

Here are three quick reasons why:

  1. Numbers are tangible — if the inputs and calculations make sense, then the outcome is irrefutable
  2. Numbers are accessible to other stakeholders — by empowering your point of contact (assuming it isn't the CFO or equivalent "numbers person") with a clearly defined CRM investment case, you are facilitating the "numbers person" and other sceptics to engage in the project. Numbers reduce the assessment of risk
  3. Co-creation makes the case more believable — Our recommendation is to build the ROI case WITH the prospect on-site. This way you reduce the potential for disputes around the inputs or benefits underpinning the ROI case. You should let the prospect pick the numbers (in terms of the benefits they think they will derive from a CRM implementation) he or she feels comfortable with. The objective is to deliver the most credible ROI, not the highest. Sometimes carrying out a "worst case scenario" can actually be even more effective, particularly if the client is very risk-averse

The Sage CRM Nucleus ROI Tool

To facilitate you in this process I have put together an accompanying set of slides that provide more details around ROI and, in particular, how to work with our "Nucleus ROI Tool". The tool itself can be opened from slide 25. There is also reference to some other financial tools that you may wish to consider.

The tool itself was developed in excel, and is designed to help you put together a basic ROI case quickly. The first sheet - "Quick Start Tab" - requires you to simply enter in various costs and benefits based on different functions and departments (sales, marketing, service etc.). This part of the tool is usually sufficient in making your ROI case. The subsequent sheets drill down into the costs in more detail.

Please feel free to share other financial tools that have worked for you in the sales process!

Regards,

David

  • I think, David, those three points are SO powerful.

    If anything, calling them "quick reasons" undersells the power of why *every* client interaction should speak in these terms - even if you are not at the actual step of building an ROI / using the Excel sheet.

    Each & every conversation should keep the "where is the value for the customer" front of mind. Putting across the idea of business returns from the very beginning will set up the right conversations.

    The co-creation recommendation (no. 3) is very important. I met with a potential client of Sage France recently. This client was a large, multi-national, company with a well formed stakeholder group & a project owner who had set the project framework and written a requirements document. What they did NOT have, however, was a well structured idea of the *business returns* they were expecting from these requirements.

    I spent a half day on site with their stakeholder group, going through the requirements and asking (quite simply) "so, what does this requirement mean to your part of the business in terms of value? What do you do now & what will this requirement mean for you -- in terms of Increasing Revenue, Avoiding Cost or Improving Service (IRACIS)?" Within 4 hours, we had collectively worked out an ROI measure for each stakeholder that would see their investment in software & services paid back in less than 18 months. And, do you know, we didn't even open the spreadsheet - instead just using the concepts and a whiteboard to work on it together.

    We now have a new customer working towards an implementation of Sage CRM.

    It works.

    -= David

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