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Simple ROI Calculator Template Instructions
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How to complete a ROI calculator for your product/company:
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1) Define the areas of value from your product (hard/soft/other). There can be multiples, but focus on the top 2-3.
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2) Determine the key assumptions and calculation to quantify that value (i.e. # of additional leads * conversion rate * ACV = value).
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3) Research industry benchmarks and your product experience for those assumptions. You want to position yourself as an expert in the space and provide new insights to the customer.
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4) Fill out a simple template with those assumptions and industry benchmarks/experience, allowing you to ask the customer in a meeting for their assumptions and update the calculator real-time.
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Note: Work with/test the template with friendly development partners and beta customers - they will give you real feedback to get you ready to use with future prospects.
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How to use the ROI calculator in a sales meeting:
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1) With your prospect, talk through the sources of value from your product.
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2) Ask them questions about all the key assumptions to see what their experience is (if they don't know the assumption, reference the industry assumption; if they are really high/low, ask them why). You learn a lot from this part.
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3) Let the calculator update the value, and comment that based on the assumptions they gave for their business, we would expect \$X in value. Ask them how that sounds.
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4) Based on their response, probe deeper on which assumptions they may be skeptical about. Ask them what value they get from their current product/process. Essentially, engage in conversation to understand the problem/value.
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5) Learn where they buy-in and where they do not, in order to tweak value proposition and inform pricing.
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Note: I never put pricing on the initial calculator (otherwise customers focus on the price instead of the value). Rather, I verbally can now say if value was \$1 milllion, then for a \$100,000 price you could have 10x ROI.
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Commentary on examples in this template:
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Note - these examples are for made-up products; your product will have different sources of value, assumptions, and quantification
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Example 1: The main value from this product is increasing the deal close rate (which leads to more revenue). It also has a secondary value of improving efficiency of sales ops/reporting (which has a softer value).
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Example 2: This product only has soft value for improving efficiency of a marketing team (and thus a little harder to quantify).
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Example 3: This product reduces the risk of a fine. It is much harder to even attempt to quantify this event, so best practice can be citing specific examples of fines, as well as industry stats of how often/how much it happens.
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