Don’t Sell Features. Don’t Sell Benefits. Sell ROI.
In France, Le Roi is king. In B2B sales, ROI is king, too. But in this case, it’s Return On Investment.
Selling ROI has two key benefits:
- You’ll close more deals (if you’re talking to the right people).
- You’ll get a higher price.
Your customers will pay more (and act sooner) because they can quantify the value of your offering. If you can show them how much money they can save or how much revenue they can generate, they’ll understand the ROI.
Selling ROI is effective. But it is also hard. You have to know your products and pricing inside out and you really have to know your customer. That requires a lot of work, a lot more than showing a customer a price sheet or a slide deck.
Features vs. Benefits vs. ROI
Here are three ways to sell a product. In this case, the product is a hypothetical computer system called Titan 2000.
- The Titan 2000 processes 1 billion instructions per second.
- The Titan 2000‘s computing power is comparable to other models in its class but at a significantly lower cost.
- I understand reducing IT costs is a high priority for you. My analysis of your system suggests that Titan 2000 can cut your IT costs by as much as 25% while still providing the computing power you need.
- The Titan 2000 pays for itself within a year. You’ll save $1 million over the five-year life of the system. A $200,000 investment has a 5x ROI.
Let’s look at the differences between selling features, benefits, and ROI:
- Selling Features — The focus is primarily on the offering and the price — Here it is. Do you want some? Feature selling is best suited for commoditized offerings where price and availability are the distinguishing characteristics.
- Selling Benefits — Benefits are reasons why a customer might want to buy something. Promoting benefits can get a prospect’s attention and — ideally — a meeting.
- Selling ROI — ROI addresses a known customer need. This requires an understanding of the individual customer’s goals and problems. You can learn this only by talking to a customer.
Why Selling ROI Works
In many cases, your biggest competitor is not another company bidding on the same project. It’s the status quo. That’s why selling ROI is so important.
A Sales Benchmark Index study showed that 58% of sales opportunities end with no decision or a decision to do nothing. Why? Because the buyer does not see the value in making a change.
Your customers will pay more (and act sooner) because they can quantify the value of your offering.
Inertia is a powerful force. You can overcome it only by convincing the prospect that a) They have a problem they need to fix now; b) You have the unspsolution; and c) the customer will get a measurable payoff for taking action. “A” is usually the biggest obstacle.
Selling ROI can overcome inertia. That helps the prospect quantify the problem and see that there is a clear financial benefit to solving it. This gives her a very concrete and compelling reason to make a change.
Rule #1 — Know Thy Offering
To sell ROI effectively, you need to know your product or service intimately. It’s not enough to know what it does (features). And it’s not enough to understand how it might help a customer(benefits).
You need to show that it solves problems for companies with specific issues. Use customer case studies to illustrate this. The most effective case studies quantify the impact — Reduced selling costs by $xxx; Increased revenue by $xxx etc.
Ideally, your marketing department can provide this info. You don’t want to waste valuable selling time doing research.
Rule #2 — Know Thy Customer
Here is where you really need to work. The first step is to make sure that you’re talking to the right person (or persons).
- Does the company fit your customer profile: Industry, company size, markets served etc.? If not, they may not have the budget or the need for your offering.
- Who makes the purchasing decision for your offering. One person? A committee? Figure this out in advance or you could invest an enormous amount of time and still fail.
Once you meet with the decision maker(s), help them articulate their “pain” and help them quantify the pain.
In an earlier post Diagnose Before Prescribing, I gave examples of questions to ask
- How high a priority is this for you? Why?
- What is it costing you not to make the change?
- What opportunities are you missing? How much is that worth to you?
- What would prompt you to make the change?
- What’s your timetable for making the change?
Do the Hard Work
Selling ROI requires an investment of your time. Your company’s sales brochures, no matter how slick, won’t get the job done.
Not only do you need to understand your business intimately, you need to understand your customer’s business. That means lots of research and analysis.
It will pay off.
About the Author | Peter Helmer
Peter Helmer is a principal in The Sales Management Group (SMG) which provides interim sales management and sales consulting services to middle-market companies. SMG works with CEOs and sales leaders to improve sales efficiency and effectiveness. SMG’s services include: sales audits, compensation plans, sales leader onboarding, and territory management plans. Peter writes the Sales Management Blog.