Everyone knows that return on investment is a fundamental metric for any type of business activity. In sales, it is especially critical—finally signing that major deal after months of haggling is great….but not so great if you spent more in time and resources in GETTING the deal than what the deal will actually net!
Once you get a handle on your true costs, return on investment is fairly easily calculated. But make sure you have an accurate read on the amount of your TIME invested.
Sales professionals should always know the worth of their time, and if you don’t, it’s easy to figure out. Just divide your annual salary by the total number of hours you work easy year. (If you’re full time and take a couple of weeks of vacation, that’s 2,000.) That not only gives your hourly wage, but more importantly, the worth of one hour of your professional attention.
And when you add in an accurate accounting of the number of hours you’ve spent on a project, you might sometimes be surprised at the true amount of investment it required.
But there’s another “return” you should be concerned with….and that’s return on experience.
ROE is similar to ROI, but turns it around—ROE is focused on the customer’s experience, and how well that person’s interaction with your company delivered the promise of your marketing message. Instead of using ROI to measure effectiveness from the inside out, ROE looks at doing business from the outside in.
Obviously, both concepts are essential to your company’s long-term viability. And accordingly, both should be given a high priority when measuring performance and success.
For example, for effective management of your sales target list, ROI is determined by the number of hours you’ve put in, along with the cost of materials, travel, lunches, and anything else spent in pursuit of an agreement.
But to determine your customer’s ROE, you have to evaluate the effectiveness of his or her personalized experience….and that tends to come not from columns of figures, but chats and comments, obtained through follow-ups, surveys, focus groups, and a wide array of other feedback tools.
Does your customer’s ROE match what your organizational brand—or your desired brand—promises?
If you can’t answer that question readily, I suggest you start digging!
Bottom line, a strong ROI will drive increased revenues and profitability….but a robust ROE will deliver strong customer loyalty, repeat business, and positive reviews that will drive even more prospects to your door.
Make sure you have both!…..and remember…
GROW BIG OR GO HOME!