Show your leads what their return on investment will be and you’re likely to win more clients. Math That Will Close Deals.
During any sales process, there is always a point in time when you need to discuss price. Hopefully you have previously discussed the general price range to make sure that you and your potential customer are at least within the same general range. But at some point you need to prepare the actual price quote. It’s at this critical point that many small-business owners fail to provide the assistance that potential customers need to close the deal. It’s not about features or benefits or service terms; it’s about money, and you need to shape their thinking about the price.
Most buyers will look at your price and compare it to what other companies are quoting them. They will then use this context to choose the winner of the contract. Though you should be able to address the differences between you and your competitors, this won’t necessarily seal the deal. In my experience it’s far more valuable to calculate the return on investment and break-even point of your proposal for the client. This does close deals.
Breaking Even
Return on investment can be measured in different ways. In the context of your client, you need to understand what tangible, monetary benefit your work will generate for the customer such as:
- New customer acquisition
- New revenues from their existing customers
- Reduction of existing costs
- Avoidance of new costs
- A combination of these factors
It’s likely that you won’t have highly detailed information about your customers’ finances, but you can set the stage for customers to use their own value calculations to calculate the ROI and break-even of your proposed price.
Show What You’re Worth
Let’s assume that you are pitching a new marketing solution for a customer with a price tag of $500,000. Since the purpose of your solution is to help your customer acquire new customers, the return on investment and the break-even analysis should both answer two questions:
1. How many customers can the prospect generate by buying your solution (ROI)?
2. How many customers does your solution need to generate in order to pay for itself (break-even)?
The problem with answering both questions is that we don’t know exactly how much a new customer is worth to your potential customer.
