A Sales Team Needs More Than "High ROI" and "Low TCO" To Compete

“How will your IT solution help me sell more pizza?”

That’s how one COO recently confronted a team of salespeople from a software integrator when they showed up for their first sales call. The salespeople could not answer the question. They had prepared for a different discussion, and the PowerPoint they brought, but never showed, included lots of technical information, along with charts and graphs showing ROI (Return on Investment) and TCO (Total Cost of Ownership)—none of which offered insight about how to solve COO’s strategic challenge. The meeting was terminated and rescheduled for a later date. The final outcome? It’s described toward end of this blog.

The pain of that interaction underscores why one of my clients, a large software developer, initiated a worldwide program to help their resellers shift from selling mainly small $20,000 Information Technology (IT) projects—which are frequently vetted using ROI calculations—to selling larger enterprise projects that require sales teams to prove strategic value along with financial returns. As enterprises adopt governance policies and “balanced scorecards” designed to promote alignment between IT investments and corporate strategy, the need to adopt a sales process that proves value beyond the achievement of simple financial calculations or Key Performance Indicators (KPI’s) has never been stronger. The project I’m currently working on provides me the opportunity to facilitate this metamorphosis.

But what’s wrong with talking to prospects about ROI and TCO?

Nothing, other than the fact that many marketers and salespeople simply fail to put these metrics in any context. Case in point: This week, RFID Solutions Online sent me an e-newsletter with the subject “Find The ROI In Your Asset Tracking Initiatives”. But the accompanying article summary doesn’t connect the value of asset tracking to financial or operational strategy.

And it’s not that there isn’t a connection. There is, but I couldn’t find it anywhere in the email. So the over-worn statement “Find The ROI . . .” isn’t visceral to C-Level executives who live and breathe strategy. This example is the tactical equivalent of a quarterback leading an offense to the opponent’s 10-yard line, and on third down saying “I think we’ve gone far enough.”

Why does ROI/TCO alone fall short? Because the “heavy lifting” in sales is in enabling prospects first to believe the facts about an issue, then to care about the issue, then to act to solve it. ROI and TCO are reasonably helpful for the belief stage (“We used the numbers the client provided for our ROI calculations!”), but marginally effective for answering the question “Why should I care?” And, if no influential individuals in an organization care about a given issue, would anyone wager that they would act to solve it?

So, beyond ROI and TCO, how can a company gain a sales advantage?

To answer that question, let’s look at how the sales team managed its setback with the pizza company COO. After returning to their office, the group took the time to formulate a set of questions about the growth strategy for the pizza company, including questions about finance, supply chain logistics, CRM, and human resources. They reformulated a presentation and met with the COO about two weeks later. Their project was approved and they won the opportunity.

What did the team figure out?

First, the team realized that positioning their offering to enable growth was mission critical for both vendor and prospect. By making the shift from a purely financial appeal to a strategic appeal, the sales team minimized the risk of “no decision.” In addition, another important outcome occurred. Because strategic growth impacts every operating unit in an organization, the sales team opened relationships with a cross-functional team of senior executives. Prior to that change, the vendor’s sales team networked only in the IT department. Finally, the sales team was rewarded with an unintentional benefit: they faced fewer competitors. Before changing their approach, the sales team competed with every vendor touting high ROI—some of which were selling IT solutions. Now, only two vendors offered a path to the strategic growth the COO required.

How did the sales team realign to address the COO’s problem, and what steps did they follow from beginning to end?

The team leveraged the competencies they already had, but had never effectively combined. They used empathetic listening skills, systems analysis techniques, and business acumen to convert what could have been a certain loss. All of these competencies rarely exist in one individual, so collaborative processes and effective team leadership were also required. The specific steps the team used will be covered in next week’s blog, “How to Uncover Strategic Opportunities through Strategic Questions.”