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“Loverboy”.. What sort of band name is that?

For those of you that are local to Southern California, you may be familiar with the music venue known as the “Canyon Club”, which is notorious for having classic rock, metal and rap acts that are long past their prime and on the slow road to the inevitable rock-n-roll graveyard.  From playing stadiums in their prime to now playing this small venue right outside the ‘Valley, their heyday has come and gone.

It is not uncommon for the marquis off the US 101 to showcase former monsters of rock, such as LA Guns or Great White.  Or 80’s icons Adam Ant, Berlin or The Motels.  Yacht Rock- check.  Kenny Loggins and Ambrosio are practically in the house band.  Heck- they even get hip hop icons like Snoop Dogg or Sir-Mix-a-Lot to spin some records on a good night.  But be careful- they sneak in some cover bands from time to time.  Watch out- Page and Plant won’t actually show up again when Zepagain hits the stage.  Nor will Don Henley or Glenn Frey be showing up as “The Long Run”.

But the 80’s hard rockers that really caught my eye recently while driving past the marquis was that of 80’s hard rock band “Loverboy”.  When I say ‘caught my eye’, I don’t mean in the sense that I would actually go to the show.  I wouldn’t be caught dead in that crowd.  I’m referring to it taking me back to that red leather’d, long frizzy hair, product of the 80’s hard rock flavor.  I could hear the driving synth and shimmery electric guitars from their hit song, “Workin’ for the Weekend”.

And in contemplating this memorable band name Loverboy, so indicative of the era, I thought.. “Loverboy”?  I thought, what in the lord’s name were they thinking when they were brainstorming over ice cold Bartles & Jaymes wine coolers at the Rainbow Bar on Sunset in Hollywood?  I mean, OK- for the late 80’s, Loverboy is perfect.  But had they considered what happens in the decades beyond the 80’s?  Where do they go with that?  How does one evolve as the band known as “Loverboy”?

Did they not see that the glam rock of the 80’s would crash and burn as fast as one could say “Milli Vanilli”?  Did they not foresee Nirvana and Pearl Jam waiting in the wings ready to stage dive into the 90’s, and steal the crown for world domination?

What if Loverboy wanted to head in the direction of say, grunge or alternative rock?  Or maybe one day they would be inspired to bust into electronic and add a guest DJ?  How does one do that as Loverboy?  Do they just feature Marshmello and DJ Khaled and call it a day?  Do they change their name to L.Boy?  Or the LB Band and go more in the jam band direction?  People, I just don’t see it.  I feel like they painted themselves into a corner.

For those of you history buffs keeping score at home, the true story is that they chose this fabulous name based on a dream their guitarist, Paul Dean had.  He came up with the name after spending the previous night with some of the bandmates and their girlfriends, before going to the movies. The girlfriends were browsing through fashion magazines, where the guys in the band saw a Cover Girl advertisement. Cover Girl became Cover Boy, and then became Loverboy in Dean’s dream later that night. True brilliance.

While I respect Loverboy for their music and hard rock hits for that era- I also have to assume they are content in their artistic choice of name, and I can live with that.

But as they unload the gear from their van and get ready for a night of screaming cougars and beyond-their-years metal heads, I wonder if they’ll consider what could have been had they chosen a name just a bit more fluid and timeless than…  “Loverboy”.

Featured

2020 is Here… What’s Your Plan to Crush Quota?

For all my sales colleagues out there, the dreaded moment has arrived.  We have gone from hero to zero.  Last year’s sales results are in.  Hopefully we have exceeded our quotas and paved our way to the much-coveted President’s Club Trip.  But no matter what the outcome- last year is history, your Sales VP has forgotten about your big wins from last year, and you are starting at 0% Quota Attainment for the year.

So what are you going to do about it?  How are you going to find success?  How are you going to put the chess pieces in place to ensure a checkmate before year’s end?

While this is as much a challenge for me as the next guy, with over 2 decades in a quota-bearing role, I’ve come up with some ideas that have worked over time. The key is your Annual Sales Plan, and here are a few of the critical elements:

  • Full-Day Team Planning Session
  • Account Plans
  • Forecast Quarterly Deals
  • Marketing Event Plans
  • Learning Curriculum

Full-Day Team Planning Session

I covered this in one of my previous blogs, and here’s a recap:

https://jasonbaer.blog/2019/02/18/5-ways-to-crush-it-in-19-with-your-sdr-account-exec-partnership/

One of the absolute gems that I figured out a couple years ago, was scheduling an all-day Workshop with your Team- which could include your SDR/BDR, Inside Sales Rep, CSM, Sales Engineer and whoever else contributes to your results.  We’re talking about loading up on a Venti coffee that morning, bringing in lunch, snacks, and having laptops and a whiteboard ready to go.  The best place to start is by identifying the top customers / prospects to target for the quarter.  This is a great opportunity to enable the team to help mold the strategy, and get their buy-in.  You can jointly research the accounts, to make sure which ones best fit your ICP (ideal customer profile).   From there- you will fill out all the fields in a Google Sheet such as contacts, contact info, and key LinkedIn connections to help get you in the door.  I know it’s tough to carve out an entire day to do this, but trust me- it pays off big time.  My SDR’s have consistently been top performers in generating SQL’s (sales qualified leads), and we agree that the Prospecting Workshop is one of the main reasons.

Develop Account Plans

Do your homework.  There is no longer a shortage of data on your accounts, it’s now a matter of scouring your research sources to find the signal from the noise. Identify the top decision makers that make up your buying committee at your top deals.  Social map them to your network on LinkedIn and find out what makes them tick.  Research the businesses of your top accounts like you’re conducting an MBA-level study on them.  Figure out what’s working for them and the gaps that are preventing them from meeting their corporate goals.  This will help link your solutions to the problems they’re trying to solve for.  And if you’re already engaged in a deal with the account, build out your close plan.  Detail the sequence of events between now and the day their executive will sign your deal.

Forecast Quarterly Deals

I know it’s early in the year to forecast all your deals for Q1, Q2, Q3 and Q4, but hopefully you were prospecting and cultivating deals in Q4 of last year.  With the view you have into your business, take a best guess as to what your target deals look like for every quarter.  I know this is a leap of faith and a shot in the dark at best, but how can you make a target if you don’t have one?  I chose 2 big deals to focus on in Q1 of last year for Q3 and Q4 that I had never spoken with, and guess what?  Both closed for a total of almost $1M by year-end.

And don’t forget to update your CRM / Salesforce to reflect your quarterly forecasts, which will keep your bosses very happy 😊.

Marketing Event Plans

You should have fun with this one.  Come up with some brilliant, groundbreaking new ideas for customer/prospect events, and share them with your marketing team.  They’ll love your input.  The more you’re invested in the event, the more attendance you’ll drive, and the more pipeline attribution will result to make your marketing team look good.  And I’m not talking about planning those boring ‘ol lunch-n-learns at a local steakhouse, or tickets to a sporting event.  Those have been way overdone, and don’t motivate the right execs to attend.  I’m talking about breaking the mold- go race luxury sports cars, do something innovative and new.  And while you’re at it, drop off something personalized to an executive you’re trying to reach- specifically centered around one of their unique interests.  Works wonders.

Learning Curriculum

How is it for the first 22 or so years of our lives, we were constantly learning, studying, doing homework, taking tests and challenging our minds for the majority of our days?  Why is it that beyond our early 20’s that constant learning just stops?  Most of our training during our career years consists of corporate mandated HR training and new hire training when we start a new job.  This doesn’t have to be the case…

So with the new year upon us, it’s the perfect time to stop being complacent and come up with your own personal learning curriculum based on what will sharpen your skills for the year ahead. This could consist of corporate-provided training, product training, online classes on Lynda.com or a free MOOC (Massive Open Online Course) like Udemy or Coursera.  Or you could do something more in-depth by taking a class at a local university or extension program, or even get a certificate, degree or MBA.  I earned 2 certificates from Cornell’s online program over the last couple years and found it to be highly beneficial.

In Summary…  Raise a glass to your successes in 2019, and get ready to chart a new pathway to crushing your quota in 2020.

When Monday comes, go get your Venti latte at Starbucks, put on your AirPods with your favorite Spotify playlist queued up, and get ready to build your plan and successfully execute in the year to come. Good luck!

Does anyone have any other suggestions for a successful 2020 Plan worth sharing?

The Mirror

When I woke up and looked in the mirror this morning, I asked myself why would I want to see this day. 

It’s nighttime, and I can’t help but follow my usual routine. 

I hop into my rental, and wander aimlessly through the Los Angeles jungle. 

The city of angels, where my angel has not yet been found. 

It’s 2am, the bars are closed and I drive down the boulevards. 

Passing women searching for business and men searching for pleasure. 

Lost souls are looking to be found. 

Open doors are shut and shut doors are open.

I’m searching for danger- the kind that will take me down.

I can’t get my fill from the boulevards, so I on ramp to the free way.

I remember hearing you should never go past the downtown borders.

Every corridor is trouble, and trouble is the game I choose to play.

I go past the downtown border.

I remember watching movies of these streets and I want celluloid.

I drive aimlessly through this danger zone hunting for a shot.

What drives me here?

Am I looking for a cheap thrill or a dose of reality?

An ending or a new beginning?

I woke up and looked in the mirror, or was it my shadow.

Stairs

Going up the stairs

Every step is a milestone

Right after I move up one

All I want is to climb up one more

When I finally reach the peak

I climb the path to the summit

Everest is not enough

I need something more

But what if I walked down the steps

What if I wanted lower more than more?

Where would the other direction take me?

Does happiness come from more, or less?

The Metaverse from the Eyes of a 10-Year Old

While all of us grown-ups, the press and corporate executives are chatting it up and speculating about the future of the Metaverse, I wanted to go a bit outside the box and get a different point of view.  To get a glimpse into the future generations’ true vision- I went straight to the source.  I turned to none other than my 10 year-old for a candid, unfiltered conversation (over pancakes).

Documented below is an unedited version of this interview:

What are your 3 favorite video games?

  • Minecraft
  • Roblox
  • Animal Crossing

What do you like about Roblox?

There are a lot of games, and if you’re bored of one thing- you can do something else.

What’s your favorite Roblox game?

Royal High.  There’s a lot to do.

Have you ever paid real money from your piggy bank to buy Roblox or in-app accessories?

Yes- I’ve spent about $20 of my own money, and $30 I got from friends for my birthday for Roblox.

Have you spent real money on Fortnite? 

I’ve spent about $40 on Fortnite.

What have you purchased with this money?

On Fortnite- I purchased skins (outfits for in-game avatars) and a BattlePass- which gets me skins and Vbux (in-game currency).  With the Vbux- I buy more skins.  On Roblox- I’ve purchased game passes which give you an advantage.  It’s basically “pay-to-win”.

What if you played w/o purchases- would they still be fun?

Roblox will still be a lot of fun without that.  There are thousands if not millions of games.  They’re not like if you purchase- you win.  There’s a lot to do- let’s take Royal High for example.  In Royal High- there are a lot of free updates where you can do quests.  The spending of money is optional- you don’t have to do it to have fun.

How about in Fortnite?

Spending money is optional.  Buying skins is just how you look in the game- nothing more.  It doesn’t help you win.  There are 2 reasons to spend your money- to look good and to help you win.

Are you glad you spent the money?

Maybe not on Fortnite.  But on Roblox- it makes it more fun, and it goes by quicker.  You don’t have to waste time farming for diamonds for hours with the multipliers and the faster-flying game pass.  It makes it more enjoyable- you don’t have to get stuff, you can just enjoy the updates.

For Minecraft or Animal Crossing- have you purchased anything for the game? 

No, there’s not really anything available to buy.

Do you prefer the free model of Animal Crossing and Minecraft, or paid model for Fortnite and Roblox?

I prefer not to have the paid option- I like Animal Crossing and Minecraft better.

What are video games going to look like in 10 years?

You’re probably going to be able to play them in VR.  VR’s going to be the new thing.  Everyone’s going to have a room in their house where everyone can play VR.  There will be food-tubes- and food will just show up.

How many hours per day will people spend in the Metaverse?

5 hours per day.  A lot of my friends play Roblox for 5 hours per day already.

What do you think VR is?

It’s like an interactive world- you can walk in it.  There’s this one thing- you can put on this vest, and you get hit- it actually hurts. 

Does it sound cool to hurt when you get hit?

Yes.

Where did you learn about VR?

A while ago on YouTube.

Do your friends know about VR?

Yeah, I have a friend that has a VR headset.  They never want to play with me because they’re always on VR.

What do they play on it?

I have no idea, but it has voice chat, so they voice chat with other people- I’m not sure who.  They’re always on VR or watching Mr. Beast (YouTube star).

Are you excited about VR?

Thumbs up.

What do you think the Metaverse is?

It’s like a different universe on a computer or something.

If you were say 22 years old, graduated from college and in the real-world- would you spend time in VR?

Maybe.  Probably.

What would you do?

I don’t know.  What if you could go to school in VR, everyone has a headset and they’re in their own home and everyone’s in a virtual school?  It just helps.  If someone’s sick, they can still learn.  It may be a cooler way to learn, but you can’t make friends or talk to friends.  Maybe that’s not such a good idea.

What do you think of the Metaverse?

Cool I guess.  I don’t think that’s gonna happen.

If you got $50,000 when you turned 22- how much would you spend in the real -vs- virtual world?

More in the real world- so I can eat, sleep, live and don’t die.  I’d spend a lot less in the virtual world, but maybe a little bit.  Maybe like 20%.  If everyone’s doing that- then it might help my reputation.  Let’s say I’m getting a job, and they asked to see my house in the Metaverse, and I show them a really lame house and they think I’m not responsible enough.  Maybe they won’t hire me.  But if I do spend money in the Metaverse- and show them that it’s a good house, and I’m responsible- they’d say, “let’s give them the job”.

OK- we’re done, thanks for the interview.  What are you gonna do? 

I want to play Animal Crossing with my friend, it’s her birthday. 

Should we buy a present for them and drop it off today? 

I’m not sure, I don’t know what they want.  I bought them a cake in Animal Crossing.

HoodieX Builds a Metaverse Business

…a fictional glimpse into the real future

As I’m sure you’ve read, the Metaverse is all the rage right now- even though mainstream adoption could be a decade out.  With Facebook officially changing its name to Meta, as well as tech heavyweights like Microsoft and Nvidia investing heavily- there is much discussion and speculation around the future vision of what the Metaverse and its variants.

Most of the discussions focus around either the consumer, social Metaverse forthcoming from Meta sometime in the future, or the corporate version of the Metaverse coming from Microsoft in the nearer term.  But the lens that I thought would be interesting to explore is not distinctly business or consumer, but how ‘businesses’ prepare for the ‘consumer’ Metaverse.  More specifically, what businesses should be thinking about as they prepare to open up an entirely new market by peddling their wares on the social, gaming, consumer Metaverse.

To do this- let’s look at a fictional company, Hoodie-X, that makes physical clothes that are sold in retail stores and can be purchased digitally via Ecommerce stores.  They became a viral phenomenon when their hoodies were spotted as worn by tech titans in Silicon Valley.  Since then- they have become extremely popular among millennials, as well as tech employees that work remotely and in companies with a more casual dress code.  Hoodie-X just hit $1B in annual sales, and is looking to open up new markets to continue their growth trajectory.

The challenge they face is that after being in business for 10 years, they’ve saturated their top distribution options across the planet.  They sell direct-to-consumer online, and have maximized their marketing efforts across all channels- including paid ads, SEO, email, social, mobile and direct mail.  They’ve partnered with major department stores in the U.S., EMEA and APAC and have experienced significant success.  While they could invest more in these areas, they’ve started to see diminishing returns from their efforts.

While it seems like a moonshot, Hoodie-X’s CMO is extremely excited about the prospect of the Metaverse.  In the company’s annual planning meetings- the CMO presents the concept of taking their entire physical hoodie line and offering virtual replicas of every hoodie on Meta’s Horizon Worlds, which is currently the most popular Metaverse available.  While the idea may seem like a novelty, the CMO expands on their plan for the Metaverse and why this could truly create an opportunity as significant or even bigger than their physical or Ecommerce business.

Here are the highlights from Hoodie-X’s case to embrace the Metaverse:

  • Sizeable New Market Opportunity by 2030
    1. The Global Metaverse Market reached USD 21.91 billion in 2020, projected to grow at a whopping CAGR of 41.7% from 2021 to 20301
    1. In extrapolating these projections, the numbers equate to a $504 billion global total addressable market (TAM) opportunity by 2030
    1. Specifically for the luxury goods niche within the Metaverse, Morgan Stanley projects that it will present brands with a $50 billion revenue opportunity within the decade2
    1. The profit associated with selling virtual clothing will be attractive given the near zero overhead
  • Mirror Avatar and Your Wardrobe
    • Establish a model that whenever a consumer purchases a physical hoodie, grant the customer a token to seamlessly redeem a digital version that can be used in their application / game of choice
    • Seamlessly mirroring the physical and virtual goods will drive higher customer loyalty for those that spend significant time online
  • Create Limited Edition Avatar Fashion with NFT’s
    • Leverage NFT’s.  To explain this concept- think of an official, custom pair of (virtual) Nike Air Jordan 1’s that have never been seen by the world.  If you were to secure an NFT for this pair of Jordans, you would own the exclusive rights to this digital asset.  This is what your brand can produce by issuing NFT’s (non-fungible tokens), which is a unique digital identifier recorded on the blockchain to certify its undisputed authenticity and ownership.
    • The more time consumers spend online, the more concerned they may be with their digital identity and potentially enjoy showing off their one-of-a-kind, limited edition NFT’s
    • Consumers will conceivably be able to traverse different Metaverse platforms with their unique, limited edition NFT fashion assets (with blockchain proof)
  • Test New, Risk-Free Fashion Concepts
    • Create a risk-free model to test new products in the Metaverse before manufacturing and releasing new physical goods
    • Generate customer surveys to collect opinions on new designs and styles
    • Build a virtuous product development cycle of Metaverse virtual tests, customer feedback and releasing new styles based on fan favorites
  • Immersive Advertising
    • Once Virtual Reality (VR) becomes a mainstream element of the Metaverse, brands can create more immersive, embedded advertising opportunities within games, concerts, events and virtual worlds
    • When Augmented Reality (AR) enters the world of the Metaverse, brands can harness their creativity by leveraging more immersive advertising opportunities that straddle the virtual and physical worlds
  • ‘Big Brother-Style’ Data Collection
    • Once VR and AR become mainstream, although a bit creepy- the tech behemoths behind the technology may be able to collect data on your movements, eye contractions and mind reactions
    • A 2018 Stanford Virtual Human Interaction Lab paper estimated that 20 minutes in a VR simulation allows almost 2 million body language recordings3
    • Tech companies can leverage this data to gain better insights on how to drive increased adoption, engagement and purchase behavior

As you consider the case that HoodieX’s CMO has made for the Metaverse, I’ll leave you with this quote from the Forbes article, “More Than A Trend: Entering The Metaverse Will Become A Necessity For Brands”

“The virtual economy will become as important as the physical economy. Many brands intuitively or on purpose are moving towards the metaverse which is creating a global economy on track to exceed the current one many times over. There will be no other option but to join it. Otherwise, you will not survive as a company.”

  • Vlad Panchenko (CEO and Founder at DMarket, a marketplace and technology for building virtual worlds) 4

1 – Metaverse Market Worth USD 21.91 Billion In 2020 and is Predicted to Grow at 41.7% CAGR by 2030 – Report by Market Research Future (MRFR) – https://www.globenewswire.com/news-release/2021/12/14/2351695/0/en/Metaverse-Market-Worth-USD-21-91-Billion-In-2020-and-is-Predicted-to-Grow-at-41-7-CAGR-by-2030-Report-by-Market-Research-Future-MRFR.html

2 – Lucrative for luxury: Metaverse could untap $50bn for brands by 2030 – https://www.cityam.com/lucrative-for-luxury-metaverse-could-untap-50bn-for-brands-by-2030/

3 – Conquering the metaverse: 3 ways that businesses can find real customers in virtual worlds – https://fortune.com/2021/12/03/metaverse-business-nfts-real-estate-virtual-reality-roblox/

4 – More Than A Trend: Entering The Metaverse Will Become A Necessity For Brands https://www.forbes.com/sites/cathyhackl/2021/06/24/more-than-a-trend-entering-the-metaverse-will-become-a-necessity-for-brands/?sh=40ce569555ab

My 2021 Challenge to the Marketing Technologists…

As we transition from the challenges of 2020 into the unknown that is 2021, I’m likely not alone in trying to anticipate what’s to come in the new year.  While no one has a crystal ball, we can at least do our best to read the tea leaves that have been put out in the atmosphere. 

The most prevalent factors for the new year I’m seeing thus far appear to be… COVID-19 business recovery, high but declining unemployment, stock market record highs, and of course- how the vaccines will change the economic growth trajectory.

In digging a bit deeper into what the experts are saying, here are two notable projections:

UCLA Anderson Forecast Report

  • 2 more quarters of slow growth (1.2% in Q4 ’20, 1.8% Q1 ’21)
  • Robust growth of 6% in the second quarter of 2021

Deloitte Economics Spotlight

  • Consumer spending will continue to feel the weight of COVID-19 and its economic impact for the next two quarters as the job market remains weak
  • That is expected to change by the second half of 2021 as rising vaccinations thwart the spread of the virus and the public health situation starts returning to normal

So net net- we’ve got to hunker down for the next couple quarters as we trudge through what will (hopefully) be the winding down of the COVID-19 business impact as vaccines get distributed.  The bright spot is that once things start to normalize, there could be a potential ‘opening of the flood gates’ as consumers and businesses try capitalize on 12 months+ worth of pent up demand.

We are in a very unique position, not like any other I can ever remember in my career.  We are stuck in an economic slowdown -> yet we have a fairly reliable view into the light at the end of the tunnel.

With that said, I want to challenge my fellow Marketing Technologists out there…

  • What are you doing today to take full advantage of the opportunity when the floodgates open?
  • What changes do you need to make for the post COVID-19 digitally focused economy?
  • How are you planning to shift from physical to digital?
  • Do you realize that if you wait until H2 2021, it may be too late?
  • Will you be ready?

Please share any thoughts / comments on your 2021 plans, and what you’re doing to obliterate the competition.

Sources:

https://www.prnewswire.com/news-releases/anticipating-a-coronavirus-vaccine-ucla-anderson-forecast-expects-robust-economic-recovery-to-begin-in-spring-2021-301189032.html

https://www2.deloitte.com/us/en/insights/economy/spotlight/economics-insights-analysis.html

Total Cost of Ownership (TCO)

Here’s lesson #2 around how you can use financial acumen to up your sales game…

Today I’ll be reviewing Total Cost of Ownership (TCO).  Often times when a company is evaluating a purchase decision, they will solely focus on the initial cost of an investment and choose the one that requires the lowest upfront cost.  However, a more sophisticated buyer realizes that this is not the full picture.  In properly evaluating the costs surrounding a project, it is more diligent to consider the initial investment plus any ongoing costs.

In layman’s terms, Total Cost of Ownership (TCO) is the initial purchase price ‘plus’ the additional costs of operation.

One of the most simplistic examples of TCO is when you purchase a new car.  For example purposes only, let’s consider someone looking to purchase a luxury car that’s evaluating a comparable Mercedes and Lexus model.  In comparing the two, they would naturally look at the cost of both- let’s say the Lexus costs $50,000 and the Mercedes costs $45,000.  A less informed buyer would view this at face value and consider the Mercedes cheaper and therefore a better value.  However, the more informed buyer familiar with the total cost of ownership concept would look at the purchase price + average cost of repairs, insurance and fuel.  When evaluating the 2 cars based on TCO- they may actually find that the Lexus is cheaper over time based on the overall cost comparison.

Here are a couple examples based industries you might relate to:

  • Marketing Tech:  What is the initial software cost + support, maintenance and IT / Marketing labor hours to integrate and manage?
  • Tech Infrastructure:  What is the initial cost for the hardware + installation, training, maintenance, upgrades and internal IT to manage and support?

As you can probably tell, TCO is extremely simple to calculate and only requires addition.  Here’s the calculation:

TCO = Purchase Price + Ongoing Costs

The output of the calculation is not only focused on the initial investment requirement, but the total cost over an extended period of time.  Here is an example of a technology purchase, comparing the initial purchase price model to TCO:

  • XYZ Software
    • Initial Purchase Price = $100,000
    • TCO
      • Initial Purchase Price = $100,000
      • Installation Cost = $50,000
      • Annual Maintenance Cost (3 years) = $150,000
      • TCO = $300,000

If you’re not already using TCO as you pitch projects to your customers, I strongly encourage you to start using it.  I’ve found that it can be much more effective when comparing your solution to a competitor, to get to the true overall cost and proving value.  It will ultimately enable your CIO, CMO or CFO sponsor to present a more accurate picture of the costs associated with your project, and help produce a win-win for both you and your customer.

If you have any feedback or success stories using TCO, please share…

Return on Investment (ROI)

To follow up on my previous post around how financial acumen can be the missing ingredient from a salesperson’s game…

Depending on your situation- business school may have been a long time ago and concepts have since been forgotten, or perhaps you haven’t yet had the opportunity to learn the basics of Finance.

For those of you that fit in either category, let’s start with the quintessential metric in trying to get a project approved, “Return on Investment” (ROI).

In layman’s terms, ROI measures the amount you can expect to profit in return from spending money on a new investment. 

Here are a few examples based on industry that you might relate to:

  • Marketing Tech:  How much will your investment increase conversion rate, and ultimately boost sales?
  • Sales Tech:  How much additional pipeline / closed won opps will result from your project?
  • Tech Infrastructure:  What costs can be cut from consolidating technologies?

The good news is that calculating ROI is simple elementary school math, only requiring subtraction, multiplication and division.  Here’s the calc:

ROI % = (Net return from investment – Cost of investment) / Cost of Investment X 100

The output of the calculation is an ROI percentage.  In other words- if you investment $1M and you can expect a return of $5M..  this would equate to a 4X or 400% ROI.  You would get 4 times the amount of your investment return, which is pretty good.  Here’s the example showing my work:

400% ROI = ($4M / $1M) X 100

Hopefully I didn’t confuse you, and I would strongly encourage you to think about bringing the ROI concept into your sales cycle.  I’ve found that by focusing on what client’s will get in return from signing the contract and making the investment, my deal flow moves quicker and customers are ultimately happier.  At the end of the day, this allows your CMO, CIO or CFO to deliver value back to the business, which is the whole point.

If you have any feedback or success stories using ROI, please share…

The Missing Ingredient from Sales

I’ve been in Tech Sales for over 2 decades, and as most salespeople do- I’m constantly trying to figure out the winning formula. 

When I typically think of the winning formula- I’d say the most simple, but reliable approach is BANT.  This is qualifying the opportunity by confirming there is an allocated Budget, the person you’re engaging with has the Authority to buy, there is a real Need for the product and a designated Timeline to make the purchase.

I’ve utilized this approach for years, and while it’s brought success- sometimes it feels like something’s missing.  There are inevitably times when your deal has all these elements, but you lose the deal anyway.  There are times when you have all these elements, yet somehow the deal disappears with a ‘no decision’.  Or you’re trying to cultivate a deal, but can’t effectively convert it from a latent to active opportunity.

I’ve personally observed several, common misconceptions from salespeople on why customers buy their products.  Some focus on their relationship, strong position against a competitor, or their product’s features and capabilities.  While all of these can be factors in a decision, they do not address the customer’s #1 concern.

While I don’t have a magic wand that will guarantee a solution for any scenario, I do believe there is a critical missing ingredient from the average Sales Rep’s game:

Financial Acumen.

According to a survey of more than 300 senior executives conducted by The Economist Intelligence Unit, 65% of the leaders felt that a lack of their employees’ business acumen limits their companies’ strategy execution. 

Reacting to the capability gap, Jeff McCreary, former Chief Sales and Marketing Officer at Texas Instruments, commented, “Solid business skills are the foundational strength of virtually any enterprise. To build a high-performing culture and a team committed to rapid execution, you have to develop business acumen. Otherwise, you won’t be as successful as you can and should be.”1

First off, what is financial acumen exactly? 

Financial acumen is defined as an understanding of the drivers of growth, profitability and cash flow as well as a firm’s financial statements and key performance measures.

So why does financial acumen matter to salespeople?  How will this help close deals and make money?

In thinking about why a prospect would invest in your product or technology, it comes down to one simple concept.  The goal of any company is to drive value back to its owners (shareholders).  In considering investing in your proposed project, the stakeholders will need to determine if it will ultimately deliver a positive impact to the company’s financial results by way of increased revenues or reduced costs. 

To put it in extremely simple terms- if they invest $1 in your technology, will it produce more than that $1 in return?  Would the investment be worth the effort if it produces $1.10 for your client?  What if the project could return $5 from the $1 investment?

I declare that it is the salesperson’s job to not only pitch why their product is the best, but it is essential in today’s business world to link their deal to the underlying projected “Return on Investment” to ultimately win over the key stakeholders, especially the CFO.

How would you rate your financial acumen?

Stay tuned, as I share more insight on the basic components of financial acumen in future posts…

  1. https://www.bts.com/news-insights/articles/the-business-acumen-imperative