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Six Reasons Why Your ROI Calculator Isn't Working
Posted on July 24th 2013
Many sales & marketing organizations today have created ROI calculators to help prospects quantify the value of their product or service. And while the concept of an ROI calculator is sound, most get sparingly used by sales professionals in the field, and even then they don’t have nearly the impact you expected.
Why is this? I believe it often boils down to one or more of six reasons:
1. It’s too complicated
In an effort to make the calculator’s results as accurate as possible, most companies make the inputs and calculations far too complicated. If the prospect can’t follow your thinking, or understand the intricacies of your math, they’ll likely give up and not understand or believe what you’re trying to communicate.
2. It’s not believable
A good ROI calculator often is more of a ballpark estimate than something truly precise, but the assumptions behind the calculations still must be rooted in reality. If the prospect doesn’t believe stated results can be achieved, then you likely haven’t done enough up-front work to establish that change is in fact possible beyond what they could previously comprehend. Oftentimes, in this case, it’s actually better to build a calculation that’s less than what you think you can actually achieve. Get the prospect thinking in your direction, then under-promise and over-deliver.
3. It doesn’t tell a story
Good sales is often based on great storytelling. Help your prospect understand where you’re taking them, and how that relates to the bigger picture of the business objectives they’re trying to achieve with or without you. Your ROI calculator, therefore, can’t simply quantify something in isolation from the rest of the prospect’s business. It must tell a story that aligns with the customer’s priorities, and helps them tell a story they’re already trying to piece together.
4. It’s hard to read
This is about formatting. Most ROI calculators are built in Microsoft Excel or other spreadsheet tools, which can be fairly wonky if not formatted well. Some of the more effective uses of spreadsheets for ROI calculators have a “summary” tab up front that’s nicely formatted and isolates the “money” metrics. Or even better, work with a company such as Visualize ROI to turbo-charge how effectively your ROI metrics are presented.
5. It doesn’t take the buyer’s point of view
I can’t tell you how many ROI calculators I’ve seen that focus on product usage, seller-specific metrics or language that doesn’t mean anything to the buyer. Carlos Hidalgo‘s mantra of late needs to be running through your brain when building an ROI calculator as well – it’s all about the buyer’s perspective.
6. It doesn’t matter
What if you built an ROI calculator that accurately and persuasively communicated something that wasn’t important to the prospect? That wasn’t something they were focused on or cared about? It happens more often than you think. Just as your product or service needs to solve an urgent problem or need, your ROI calculator needs to focus on that same “compelling event” as well.