On LinkedIn Answers today, there was a discussion about whether ROI discussions matter in sales in this economic situation. This was a good answer from Thomas Biggs.

As a former CFO of a billion dollar organization a positive ROI was necessary to get my support. To get my support a project had to have the following criteria:

1. Within the scope of our existing priorities;
2. A solid business plan;
3. A plan for a annual retroactive review to assure that the project is meeting the objectives.
4. A champion that I could hold accountable for the project.
5. A well vetted, risk adjusted ROI, that was based on reasonable and supportable assumptions.

In times like this, it is even more important to do thorough ROIs on all projects. By thorough, I mean the inclusion of a risk factor and well vetted facts and assumptions. With funds being limited, it is important that they be spent on those projects which provide the best return. [Editor: And advance overall goals and values of the organization].

As it relates to CapEx or OpEx, the decision to use either should be part of the ROI. If the project has a very positive ROI and the company has the funding to support the project, than the project should move forward.

Making decisions based on sound business practices is the key to long term success. An ROI analysis is a very sound business practice. As a result I was always willing to support projects that met the above criteria.

Another answer came from Chip Nickolett:

Not only are organizations being forced to do more with less, timelines for projects have been shortened to have a more immediate and measurable business impact. Expenditures that don’t make an immediate impact (i.e., within 12 months) will be tough to get approved, unless it is essential and in-line with the strategic plan for that business. ROI and TCO are more important than ever in this economy since they focus on both CapEx and OpEx, and have a direct impact on profitability.

[Editor: That's sound business advice].

When coaching with Loral, it was always about the Cash Machine and RGA (revenue generating activities). If it didn’t generate revenue, outsource it. It’s about activity, but more importantly, the RIGHT activity.  In marketing, you might be throwing spaghetti at the wall to see what sticks, but is that the right activity? Will it garner the desired result?

Sales professionals know that if they follow the sales process, they will close sales. They also know that they have to generate the correct amount of sales activity. Prospecting must be done in earnest. Appropriate open-ended questions must be asked to probe the client and garner interest. A solution is proposed.  Follow-up, follow-up, follow-up.

It is often said that sales is a game of numbers, but that’s only true in the essence that if you dial 25 people and get 5 appointments and get 1 sale out of it, those are your probabilities. So to get 8 sales that month, you have to call at least 8 times 25 people to set 40 appointments to (hopefully) result in at least 8 sales. That’s why you have to be working on your sales activity efficiently daily.

“Consider this. If you are comfortable with the activities you engage in, then you are simply doing what you’ve already been doing, which will produce the same results as before. … However, if you are willing to do the things that make you uncomfortable  – a new activity, strategy, or developing a new skill – then you will create new results.” [Keith Rosen on AllBusiness.com]

You have to find your mate. Court them. Eventually propose. Although that may not be what dating is like today. Here are 3 articles explaining how Selling is like Dating.

Business development 101: It’s a lot like dating. “You can stand outside the supermarket, asking every passer-by to kiss you — but it’s hard work and you’re going to get slapped a lot on the way to that first kiss. (Corallary: People would rather go out with someone they know than with a stranger.) …. It’s important to have a lot of contacts (i.e., potential customers) at the top of the funnel because the sales cycle is so variable. The overwhelming majority of customers buying your services do so only when they decide that they have pain you can address — and not before.”

10 Dating Rules That Can Help Your Career: “Desperation is Not Attractive” and “Listen More Than You Talk”

How is Selling Like Dating? “Close on a commitment. In dating, you wouldn’t end a date with “See ya.” In a sales call, to build a long term relationship that leads to closed business, you want to always get a commitment that advances the sale.”