I truly believe in the power of ROI tools and value calculators to help generate better, more qualified leads for B2B marketers and enhance a B2B salesperson’s ability to close a deal. (If I didn't, I wouldn't be in the business of selling them.)
So when I read Jean-Marc Bellot’s blog post, “Why You Should Get Rid of Your ROI Calculator,” last month on LinkedIn, I felt compelled to put together a response.
Here is a summary of his points:
- Putting an ROI tool on your website assumes that all customers are identical.
- Having an ROI tool on your website provides your prospects with the justification to buy from your competitors.
- Encouraging your salespeople to use your ROI calculator encourages them to make “really stupid statements.”
- Reducing the concept of value creation to a calculator decreases the customers buying experience and castrates sales.
- For a customer, ROI calculation is not an event, but a process.
Let’s examine these points one by one.
1 | Putting an ROI tool on your website assumes that all customers are identical.
It’s true that no two customers are alike. The thing is, good ROI tools actually account for that fact and are built to help prospects decide if a given solution is a sound economic investment. That means the tools incorporates industry and benchmark data but also allows prospects to modify any data inputs or assumptions to make the calculations reflect the economic realities that drive their business.
Takeaway: Look for an ROI tool that provides the ability to modify the inputs, not one with hidden assumptions and blind calculations of value.
2 | Having an ROI tool on your website provides your prospects with the justification to buy from your competitors.
So, prospects are using your ROI calculator to research pricing and then they end up buying from your competitors? If this is the case, I’m not sure your ROI tool is the problem.
When you think about market definitions, you've got two ends of the spectrum to consider. On one end, you have sales teams that sell absolute commodities. In this environment, competitors all deliver the same amount of value. In that case, the lowest-cost competitor should always win. Any company that invests in an ROI calculator on their website to help prospects evaluate their purchase decision in a commoditized market is wasting money. (After all, you don’t need a calculator to tell you which company offers the lowest price.)
On the other end of the spectrum, you have companies that provide differentiated offerings that deliver more value relative to the competition. In that case, the value calculator or ROI tool only emphasizes why the prospect should buy from you.
Takeaway: If your offering delivers value differently than your competition, a value calculator on your web site is one of the best ways to communicate that value, generate buyer interest, and capture leads.
3 | Encouraging your salespeople to use your ROI calculator provides them with an incentive to make “really stupid statements.”
No respectable sales enablement tool incentivizes salespeople to make stupid statements. That’s because a well-designed value calculator or ROI tool doesn't make any absolute or fixed assumptions about the value that will be delivered. Instead, it provides the salesperson with a tool to have a discussion with the customer about the problems that they have and how their solution could:
- Solve those problems,
- Provide value to their business, and
- Justify the investment in the proposed solution.
We've written before about how some sales teams put the focus on the wrong benefit with certain customers (for example, serving up “labor savings” as a benefit to companies that, for a variety of reasons, really aren't interested in labor savings). Salespeople definitely need a basic level of business acumen to understand these kinds of trade-offs that customers make. However, they should not be expected to become financial experts.
Takeaway: If your ROI tool causes the salesperson to make a “stupid statement,” then it isn't an effective tool and should be updated.
4 | Reducing the concept of “value creation” to a calculator decreases the customers buying experience and castrates sales.
Customers are now in the mode of conducting the majority of their buying process online before ever talking to a salesperson. Consider these statistics.
- A CEB study of more than 1,400 B2B customers across industries revealed that 57% of a typical purchase decision is made before a customer even talks to a supplier.
- Sirius Decisions' research indicates that 67% of B2B buyers begin their purchasing journey online.
- Other B2B sales and marketing experts have put this figure as high as 92%.
The bottom line is, if you aren't providing tools to help a customer learn more about you and what you can offer, you are likely being eliminated before they even talk to you. It is hard for me to imagine a better way to castrate sales then to not allow them to talk to over 50% of prospective buyers.
Takeaway: Any tool you can put online to help prospects make their buying decision -- especially if it helps them to understand why they should purchase your offering -- is a good thing.
5 | For a customer, ROI calculation is not an event, but a process.
That’s true. Many companies treat the business case analysis (or ROI analysis) as a one-time event, but every business decision should be evaluated continually. Once you make the investment in a solution, however, the cost of that initial investment becomes sunk cost and is no longer relevant in the ongoing analysis of the investment. However, vendors can use ROI tools at renewal time to justify the ongoing investment in their solution.
Takeaway: Every company should continually evaluate the performance of its investments and ROI tools can aid in that ongoing evaluation.
What’s your take on the value of ROI calculators in your marketing and sales process? Please share your thoughts in the comments section.