Five Reasons Hosted ROI Calculators Trump Excel Spreadsheets

When prospects come to your website, do you make it easy for them to see how much money you can save them? Do you have ways of clearly showing on your website how much more revenue you can help them generate?

Moreover, when your sales reps actually get to interact with prospects, are they well equipped to show the value of your solution in dollars and cents?

Whether for lead generation or closing deals, many sales and marketing teams have generated spreadsheets using Excel to illustrate the value of their solution or product. However, spreadsheets pose a number of problems — in the worst cases, these problems result in prospective buyers moving on to the next vendor’s website or dropping out of deals altogether.

An online ROI calculator built using a dedicated platform can help you avoid these challenges. Consider the following reasons spreadsheets fail and why hosted ROI tools are typically superior.

1. Salespeople dislike overly complex marketing assets. Whenever sales reps think a spreadsheet looks too complicated or dense, they usually opt to leave it by the wayside rather than incorporate it into their selling process. This is a waste of marketing dollars and needlessly leaves reps unable to illustrate your solution’s value. Consider the complexities in the image below, which is from an internally-created ROI calculator shared with me by one of my clients, a $1.2 billion technology company. One of the reasons they came to me is they were looking for a simple, attractive user interface to overcome sales resistance, an example of which is also shown below.

Spreadsheet SummaryROI Tool Summary2. It is difficult to create compelling summary reports within spreadsheets. Again, from my same client, the images below show the difference in presentation. Prospects today expect reports that not only look professional but also are easy to share with colleagues.

Spreadsheet ReportROI Tool Report3. Spreadsheets are notoriously error prone and difficult to maintain. This is one of the biggest reasons spreadsheets tend to fall into disuse. By contrast, ROI platforms are centrally managed and maintained, and thereby eliminate version control issues, outdated data, field modifications, and unauthorized usage.

4. Prospective buyers question the credibility of spreadsheets created by vendors. Generally speaking, ROI calculators created by third parties are viewed as more trustworthy than homegrown spreadsheets.

5. Spreadsheets are not mobile-friendly. Mobile devices limit the user’s ability to access and easily view spreadsheets. Contemporary ROI tools are designed to accommodate all types of devices.

Changes in B2B buyers’ behavior and the ubiquity of mobile devices have converged to make spreadsheet-based ROI tools passé. What’s a savvy B2B marketing and sales organization to do then? Many companies decide they’ll build a tool on their own. However, based on my experience, this usually incurs internal costs that can be far higher than simply contracting with an established vendor that creates ROI tools. My recommendation is to find a vendor with an ROI platform that can easily deploy, maintain, and update your ROI tools. This will allow you to drive the most incremental revenue and to do so with a cost effective budget.

What are you doing today to show prospects the value of your solution? What are the pros and cons of your approach? Please share your experience below.

The Value Lifecycle: Establishing Your Value in the Market

This is Part II of a five-part series about the life-cycle of value in B2B selling and marketing. This installment explores how to establish the value of your offering.

Value Lifecycle Phase I

Although value in a B2B context is always about dollars and cents, value and price are not the same thing. When marketers start the process of setting a price for a product or solution, they usually look around to see what the competition is charging, and then they set a similar price. Or they look at their costs and tack on an acceptable margin.

That’s the wrong way to look at things. You need to first do the hard work to understand the value of your offering.

Value starts with looking at the economics of the customer and doing a pro/con analysis of your offering against their next best alternative. Sometimes that’s a competitor’s offering. However, it’s often “do nothing” or pursuing a homegrown solution that’s created internally.

If you add up those pros and cons (your value elements), you can establish the value your offering creates for a customer based on what you do differently. That value should be measurable in currency and should be specific to each customer (or segment). Once you do this analysis, you can set price. Here’s the formula: the maximum price you can charge is the value you create minus the value of the next best alternative, plus the price of the next best alternative. However, you cannot charge the maximum price, because at that price the customer has no incentive to change, because at that price you are leaving no value for your customer. You need to share some or even a significant majority of the value your offering creates to incent customers to buy and sustain your market.

As an example, let’s look at the B2B marketing and sales enablement tools that my company sells. Part of the value we create is additional leads and more closed deals. While our competitors may not be able to offer customers as many incremental leads and closed deals, they still offer something along those lines. The big value we create over our competitors is our consulting services — not only do we create the tool, we help our clients define and communicate the value of their offering in terms their customer will understand and accept. This not only makes the tools more effective but also gives our clients an inherent time-to-market advantage. Our pricing strategy is to then capture some of this incremental value we create vis-à-vis the next best alternative, which can be either “do nothing” or a competitive product (a competitive product could include an internal homegrown tool).

In our view, all marketers should spend time doing this analysis, but figuring out incremental value is a difficult task. That’s why many marketers take the easy route and set a price based on how much it costs them to make their product, or they take the competitor’s price and simply charge a 10 percent premium or discount. But neither of those things helps you establish your value, nor does it allow you to capture an optimal share of that value.

Phase 1 is all up to the product or marketing manager, but these decisions will heavily affect the sales team later in the value life-cycle when trying to find leads and close deals.

Next week we’ll explore Phase 2, demand generation.

Has your company/team performed an analysis like this to determine your value? What are some lessons you’ve learned about value and pricing in your career? Share your thoughts in the comments section. 

Getting to a Successful Close: The Four Phases of Value in Sales and Marketing

This is Part I of a five-part series about the life-cycle of value in B2B selling and marketing. Part I is an introduction and a summary four phases of the value life-cycle.

Whether you’re in sales or marketing, it is obviously in your best interest to understand what value you offer to customers. What most sellers and marketers don’t realize is that value has different meanings depending on where you are in the marketing/sales cycle. The “value life-cycle” has four distinct phases (listed below) – as you’ll see, different phases require input from different roles in the company.

Stratavant Value Lifecycle

Stratavant Value Lifecycle

Phase 1: Establish Offering Value (and price)

Initially, a marketing/development team defines value and sets price for a new offering. The common mistake here is that marketers set the price based on what the competition is charging or, worse yet, based on their own cost – not based on the value they create relative to the competition. During Phase 1 you will always be measuring value against the customer’s next best alternative (often a competitive offering).

Phase 2:Demand Generation

At this phase, marketing aims to project to the customer a picture of how your value can help them relative to what they’re doing today. At this point in the value life-cycle, you are trying to “shine a flashlight” on how much the problems that you can solve are really costing them. During Phase 2 you are measuring value against their current state.

Phase 3: Competitive Differentiation

At this point, sales (with support from marketing) needs to show the customer why their offering provides more value and is a better fit than competitive offerings. In Phase 3 you are showing that the total value your creates – throughout the life-cycle of the solution – is higher than the total value created by the next-best alternative (aka, a competitor). This is often referred to as TCO, or Total Cost of Ownership.

Phase 4: Business Case & Cost Justification

By Phase 4, the sales team is actively trying to close a deal. A cost-justified business case is key to convince a financially minded approver (often a CFO or someone from finance) that an investment in your solution is in their economic best interest.  During Phase 4 you are showing the Net Present Value (NPV) and Return on Investment (ROI) of investing in your solution (as we’ve written before, this is why it’s important to understand financial terms and communicate intelligently with CFOs). This type of analysis compares their current state of cash flow against what their cash flow will be after they invest in your solution.

How you think about value should change based on which phase you’re in. Phase 1 is strategic marketing, and the meaning of value is very different from Phase 4, during which sales is talking with the customer. The way you think about value at each phase will have an enormous influence on your ability to successfully position your product in the market and keep deals moving through the pipeline until they end in a successful sale.

While most people in sales and marketing do think (and talk) a lot about value, they don’t necessarily think about it within this framework. We’ll explore each of these phases more in four upcoming blog posts.

A final note: the word “value” is always about dollars and cents in the B2B world. If you can’t lower the cost of doing business for your customer and/or find a way to help them increase revenue, you’re not offering value and customers shouldn’t buy from you.

How do you think about value for your offerings? Do you have tools that help you to show value across the various stages of the value life-cycle?

The Year in Value: What We Learned from Top Industry Trends

In our view, this was the year many companies finally started to understand a solid trend: if sellers and marketers want to be successful, they must speak the language of value with buyers.

If you’ve been following research and reports for the last few years from the major industry players, then the need to focus on value is no surprise. Consider the following key statistics that have influenced thought leadership in sales and marketing.

  • A CEB study of more than 1,400 B2B customers across industries showed that buyers have made up to 57% of a typical purchase decision before talking with a salesperson. (Other industry analysts, including IDG, DemandGen, and Forrester, have put this figure even higher, at around 70%).
  • Sales is consistently losing deals not to competition but to buyer inertia — a CSO Insights study conducted this year among 1,200 B2B organizations found that 26% of forecasted deals were reportedly lost to “no decision.”
  • In a survey of 230 decision makers, Forum Corporation reported that 33% of buyers would prefer to buy from someone who understands how to add value rather than from someone they already know and trust.
  • In a Gartner survey of about 500 IT buyers, the number one most influential marketing activity was proven to be “direct interactions with providers.” However, the report notes specifically that these buyers wanted to talk with “industry and technical experts” — and not with salespeople.

All of these trends highlight a common theme: buyers are looking for value. That means that sales and marketing teams must learn how to communicate value at all stages of the buying cycle. Before they can close deals, they must create engaging and educational experiences for buyers. These experiences have to be tailored to the prospect and must take into account the prospect’s business challenges and needs

This is something we’ve written about before, and is obviously a huge shift from the days when sales controlled the flow of information. Cold calls, meetings with customers in the field, and static marketing campaigns are all becoming examples of outmoded activities for salespeople and marketers.

We think it’s safe to say that the actual jobs of sales and marketing teams are not going anywhere. But the buyer’s journey has shifted, which means the job of sellers and marketers must shift as well. We’ll explore those implications more in an upcoming blog post about what you need to be successful in 2014.

What’s your takeaway about selling and marketing from 2013? Share your thoughts in the comments section. 

Strengthen Your Sales Pitch with a Business Case

During my conversation with Kevin Purcell of Hewlett Packard some weeks ago, we discussed the idea that a business case has become a staple of success in sales. Not only has it become a staple, but we also agreed that this is a permanent condition.

Here’s more context. When the economy was good, sales and marketing would generally expect to rely on deeper pockets and looser budgets. CFOs or other budget-minded decision makers were not necessarily as likely to be involved in every purchasing decision, unless it was a major investment. However, in a slow economy, a strong business case was necessary to get budget allocated even for smaller investments. Without solid numbers to support their position, sales and marketing didn’t have a lot of leverage to close deals.

What I see happening now is a permanent shift toward needing a business case. Whether the economy is soft or strong, everyone is thinking like CFOs and scrutinizing projects for indication of a measurable ROI. For example, this recent blog post, “Six Steps to Building a Better Business Case,” on takes for granted that a business case is a necessary component of a successful sales pitch. The very first question they advise asking when assembling a business case is “What is the potential value in this situation?”

“A strong business case begins with a logical financial and strategic foundation for value creation.  If you are selling a product, this is as simple as explaining why the product creates more value for the customer than any alternative. If you are selling the idea of a business partnership, you’ll want to focus on why the partnership will create a high return on investment.”

The days of being able to “wing it” and close deals without a compelling economic business case and cost justification are over.  The new normal requires that we all help customers to cost justify our solution to be included in the business case portion of their budget authorization.  If you aren’t doing that, then chances are you aren’t closing as you should be.

What are you doing to help customers cost justify the investment in your solution?

Three Ways to Rev Up Your B2B Demand Gen Results with Online Calculators

Most marketers would agree—effective business-to-business demand generation revolves around three tenets:

  • Customize the message,
  • Encourage involvement,
  • Demonstrate financial benefits.

Fortunately, online value calculators meet all three of these masters. In fact, every day, sales reps use these calculators to successfully shorten the sales cycle and close deals. And many (if not most) B2B marketers have a calculator or two parked on their corporate websites.

But imagine the power of online value calculators when they are put directly in front of a larger group of prospects. Easy-to-use calculators that ask a few simple questions are a great way to help your prospects take the first step in understanding the value your solution can bring to their business. They can help you:

1. Spark an immediate reaction that generates more leads. As offers go, online calculators are uniquely engaging; prospects often find themselves interacting with the tool before they know it. Whether you ask your respondent to profile before using the calculator to maximize lead collection, or require them to profile to download a summary report to optimize lead quality, calculators are a proven way to generate stronger click-through and response rates than other, more traditional offers.

2. Engage prospects in ways that improve lead quality and conversion. A prospect who has used your online value calculator now understands your solution and its potential value to his or her business. Although other forms of online content (such as white papers, videos and infographics, for example) can be effective offers, they don’t have the power to provide a custom assessment of your solution’s financial benefits.

Engaging email featuring an online calculator.

Engaging email featuring an online calculator.

3. Cultivate existing leads and thus shorten the sales cycle.
In addition to lead generation, online value calculators are ideal for use as part of lead nurturing. Exposure to one of these tools can take top-of-funnel leads and move them along the lead qualification spectrum by demonstrating to them the specific financial upside of your solution.

Ultimately, the best way to make the most of your online value calculator is to build a demand generation campaign around the tool. First, create a microsite to host the calculator and tell your marketing story. Drive prospects to the microsite by promoting it on your corporate website, promotional microsites, or in third-party media buys. Showcase the online calculator in email to cross-sell and up-sell current customers and prospects, or feature it in lead nurture streams. Plus, include links to your online calculator in your online user communities and social media properties.

No matter how you target your customers and prospects, a demand generation program built around an online calculator is an ideal way to ensure a wider audience has every opportunity to understand the true value of your solution.

Is it your experience that online calculators are more successful than other offers? Have demand generation campaigns focused around the tool provided a boost to your results. Share your thoughts in the comments section.

This article was written by Linda Lucido, Partner and Planning Director of Integrated Marketing Partners (

Social Media and B2B: Where’s the Value?

Social media has obviously generated a lot of interest among B2B sellers and marketers as a tool to find prospects and close deals. The sheer number of people on social networks is impressive (LinkedIn: 225 million users, Twitter: 200+ million active users, Facebook: 1.1 billion users), and the numbers continue to grow. With all that activity, you’ve got to figure that at least some percent of those users are B2B buyers. And if you’re in sales or marketing, you want to be where the buyers are.

A few years back, a study from CEB of more than 1,400 B2B buyers in various industries revealed that up to 57% of a typical purchasing decision has been made before talking with a salesperson. That’s how much the Internet has changed the sales cycle. It’s a powerful statistic, but it hasn’t quite dissuaded skeptics from dismissing social media and social selling as a waste of time.

If you’re a regular reader of this blog, you already know that I’m always talking about value. Sellers and marketers must clearly define their value — and, most important, quantify that value in financial terms — if they want to gain traction with prospects in a B2B space. The interesting question to me is how we can actually show the value or ROI of using social media (which I’m defining not just as participation on social networks but also inbound marketing and content marketing).

Let’s start by considering where we might see quantified benefits via social selling:

  1. Additional leads (which should lead to more closed deals)
  2. Higher close ratios (based on the idea that social engagement is highly targeted and relevant)
  3. Higher average selling price (because you’ve used social insight to figure out what buyers want and are tailoring products and services accordingly)
  4. Slight reduction in selling cost and traditional marketing (rather than producing expensive printed assets and advertising, etc., you could potentially use social engagement instead)

From a business perspective, you need to evaluate social activity based on how it impacts your income statement. Personally I believe that every company should leverage social media on some level. It’s just a question of where, and how much. That’s one of the reasons we created our B2B Social Media ROI Calculator. We want to help companies see where those opportunities are. For your company, ROI may be something you have to build slowly, over time, because not much opportunity is there yet. But it could be very helpful to senior executives to see the financial impact of a higher close ratio that is a result of your social activity.

On the other hand, if many of your B2B prospecting opportunities are already seeking information on social media, you’ll eventually suffer if you don’t get on board. In other words, it may not be a matter of increasing your close ratio — it may be that your lack of social activity is causing your close ratio to drop. (That’s where I’d say the technology markets are right now. In the tech sector, anyone who’s not on social media is virtually invisible to B2B customers and prospects.)

Over time as more people engage on social media, all companies will need to choose which channels are best to reach their target audience. If you’re curious, spend a few minutes with our social media ROI tool today and let us know what you think of your potential!