How to Calculate the ROI of Your Sales Tools
Think about this scenario: Your organization is ready to invest (or renew) hundreds of thousands of dollars (or perhaps millions) in your sales technology stack and tools for your team, but the executives and the finance department want you to calculate the ROI to justify the expense of each tool.
The questions you’d have to answer are:
- How will you measure the sales tools’ ROI and over what period of time?
- How quickly will the company see ROI?
- Why did you choose certain tools over others? (There are more than 700 sales technology vendors and every day the list grows.)
- What are the ongoing costs to support these tools and what training is required to maximize them?
- How will you ensure buy-in & adoption from the sales reps?
Answering these questions is a big challenge. And that’s exactly the position I was in a few years ago when I sat in the seat as a VP of Sales. In this article, I want to show you how I answered the questions then and how we help our customers answer the same questions now at Vengreso.
Importance of Tracking the ROI of Your Sales Tech Stack
The good news is that it’s easy for sales leaders to track the impact of each sales tool. However, I’ve learned that it’s important to track more than revenue outcomes. As sales leaders, we should also track leading indicators such as activity and behavior so we can see what’s working and not working for our team.
That includes tracking prospecting, networking, email outreach, calls, meetings, pipeline growth, deal velocity, and, of course, closed-won and closed-lost outcomes. These activities can be tracked in part by making some easy tweaks to your CRM.
In fact, this is why LinkedIn® asked me to speak at their Annual User Conference in 2015 when I was formerly a VP of Sales. In that role, I was able to drive 100% rep adoption with Social Selling and Video Sales Training. The result? 100% of my reps were able to attribute at least one sales opportunity to the open, closed-won, and/or closed-lost sales pipeline.
Most leaders I talk with – and I host more than 200 executive sales leader calls per year – aren’t effectively tracking the ROI of sales tools or sales training. Specifically, they’re not tracking how sellers are using tools to open or move opportunities along the buying journey to a closed outcome.
Without tracking this information, executives, finance leaders, sales, and sales enablement leaders are left in the dark with regard to rep adoption of the tools provided to them. Often, sales and finance leadership do not understand the value of the sales tools they have deployed within the organization and/or the value they bring to their sellers. Therefore, it’s possible the bean-counters may cut sales tools and technology that contribute to your seller’s effectiveness.
However, by adding a simple drop-down set of questions to your CRM at strategic points, sales leaders can identify which tools are the most and least effective in helping open and closed opportunities, which tools high-performing reps are using vs. those that are under-performing, and which tools aren’t being used often enough to provide an ROI back to the business.
In this article, I break down for you – the sales leader – the process of tracking the ROI of sales tools, how to secure buy-in from your reps, and how this differs from tracking marketing campaigns.Most #SalesLeaders aren’t effectively tracking the ROI of #sales tools or #SalesTraining. @M_3jr shows why this is important and how to do it effectively. Click To Tweet
How to Make the Most Out of Your CRM
I’ve learned that the foundation for tracking the ROI of any tool in your sales tech stack is having a customer relationship management (CRM) platform that is wired to optimize every stage of the selling process.
A well-configured CRM becomes a centralized hub for sales leaders and sellers to track sales conversations, opportunities, and outcomes.
Do you track all of the information you need to calculate the ROI of the various sales tools used throughout the selling process?
I’ve found that for many sales leaders, the answer is no.
One common reason is that they rely on marketing to define and track the lead source, with options such as email, PPC ads, SEO, events and other marketing campaigns.
It’s great that marketing tracks the impact of their campaigns and where leads are coming from, but once a marketing lead comes in, sales reps still have to do the work of outreach and engagement.
In addition, I don’t know about your marketing organization, but in nearly every organization we work with sellers are sourcing at least 50% of their own leads.
So how are they doing it, what are they using and how can you replicate/duplicate what the higher performers are using to drive further growth?
Track Which Tools Sellers Use
Here are three questions every sales leader should want to answer to create a high-performing sales team:
- Which tools are your sellers using to secure meetings?
- Which tools are they using to create opportunities?
- Which tools are leveraged throughout the sales process that ultimately lands in a closed-won or closed-lost position?
This information will show you which tools high-performing reps are using at various stages and provide insights about how other reps are using (or not using) the same tools. For instance, a high-performing sales rep may use LinkedIn® to secure a meeting and Xant to convert that meeting into an opportunity.
However, you may learn that reps who are struggling to hit quota aren’t using LinkedIn® to secure meetings. Then, you may learn that they’re struggling to convert meetings into opportunities as compared to high-performing reps. This could be because they haven’t developed trust and/or a relationship with a prospect before the first meeting.
With this information, you can effectively coach your seller on how to leverage LinkedIn® and possibly other social media platforms to establish a relationship with a prospect before that first meeting.
Tracking sales tool usage will reveal:
- Which tools sellers find most important at each stage of the sales cycle.
- The value each tool brings to your sales team’s results.
- Which tools your reps aren’t using at all or not using to their fullest potential.
How to Calculate the ROI of Your Sales Tools
As I mentioned earlier, tracking the ROI of your sales tools only requires a few tweaks to your CRM so you’ll know which tools sellers use to:
- Create an Opportunity
- Close an Opportunity (whether closed-won or closed-lost)
- Book More Meetings
To identify which tools are most valuable to your sellers, you need to add a required, multi-select drop-down question in a minimum of two but preferably three places that allow sellers to select which tool they used at that point.
Every sales organization’s tech stack will be slightly different, which means your drop-down list may vary, but one example is:
- Not Applicable
Again, your tech stack may look different. The point is that you want to ask a similar question at each stage because even if a seller didn’t use a tool to open or close an opportunity, it doesn’t mean that tool wasn’t used earlier in the process, such as setting up the initial meeting.
On the flip side, just because a rep used a tool to set up the initial call, it doesn’t mean they used it to close the opportunity. Tools that are used to fill sales pipeline and secure meetings are just as valuable as those that help opportunities result in closed-won.
To track the ROI of each sales tool, as well as training, you need to look at which tools are being used and at what stage.
The required, multi-select drop-down question should be inserted in at least two of the following three places in your CRM (preferably all three):
#1: When Scheduling Meetings
While I recommend that all sales organizations track meetings, this may not be part of your sales team culture – and I’m not here to suggest a change in your culture.
But if your organization does require meetings to be logged, then add the following required question and multi-select drop-down of sales tech (below suggestions are just examples) used for prospecting:
“What prospecting tool(s) helped you secure this meeting?”
- Not Applicable
Then you will know exactly which tools your reps are using to secure meetings. Note, this list of tools may be different than in the next two sections. A great enablement team will analyze top performers vs. bottom performers to see who is using what. Once you have enough data you’ll then be able to coach for improvement.
#2: When Creating an Opportunity
Most sales organizations should be tracking their opportunities, which means it won’t be that difficult to add an additional, required field for sellers to complete when they create or update an opportunity.
In the opportunity or deal record, add the following required question and multi-select drop-down of sales tech (below suggestions are just examples) used to help create the opportunity:
“What tool(s) helped you create this opportunity?”
- Not Applicable
One key is to list all of the tools available and have the exact same list when creating and closing an opportunity in order to track consistent data for accurate measurement.
#3: When Closing an Opportunity
When reps close an opportunity, you will ask a similar question with exactly the same options. This field is required whether an opportunity is closed-won or closed-lost.
In the opportunity or deal record, add the following required question and multi-select drop-down of sales tech (below suggestions are just examples) used to help closed-won or closed-lost the deal:
“What tool(s) helped you close this opportunity?”
- Not Applicable
The results will help identify any differences in the use of tools between your successful sellers and the reps who don’t perform as well. Additionally, you’ll see if there are certain tools that increase the frequency of closed-won opportunities.
For instance, you may find that closed-won opportunities almost always include LinkedIn® Sales Navigator to help reps connect with decision-makers at a prospective organization. But on closed-lost opportunities, you may observe that reps don’t use Sales Navigator.
This provides a perfect coaching opportunity to help sellers realize how they can use Sales Navigator at this stage to connect with all the decision-makers to improve their chance at increasing their closed-won rates.Tracking which #SalesTools sellers use will identify any differences between successful #sellers and the reps who don’t perform as well. Are you tracking how sellers use the different tools? Learn how with @M_3jr. Click To Tweet
How to Secure Buy-In from Your Sales Team
I know what you’re thinking: “My sellers are not going to like having to fill out MORE required fields.”
Trust me, if you position this right, they will love the power you are giving them. I know because I’ve secured 100% buy-in from a large sales team before. I mentioned earlier that LinkedIn® invited me to speak at their annual user conference in 2015 because I accomplished this feat. You can watch my presentation here:
Yes, your sellers may complain. After all, it’s a little additional work. But do you know how long it will take your sellers to complete each one of these questions?
Yes, that’s right. Only 7 seconds. I’ve timed it.
All they have to do is read the question and select the tools that they used at that particular stage. There’s no entry or open-ended question. It’s simply read and select from a drop-down list.
Empowering Your Sales Team
It’s possible that your sales team doesn’t buy the 7 seconds (and they may not even though it’s true).
Be sure to tell your team that you are empowering them to positively impact the company’s investment in them through the sales tools they are provided. All they have to do is track which tools they use most often.
Their actions and results are directly influencing which tools the company keeps and which it does not so that you can re-invest in tools that will actually help them improve their sales results. Let them know that just by completing a simple drop-down question, it is their voice that will impact which tools the company invests in to help them succeed.
They are in the position of power to control the future budget and investment!
How Is This Different Than Marketing Campaigns?
Undoubtedly, your sellers won’t be the only ones questioning these additional fields. Marketing will want to know the difference between these new fields and how they track their campaigns. I get this question from our customers all the time.
As I mentioned earlier, marketing has a database field called ‘lead source.’ This usually includes email, social media, paid, organic website traffic, downloads, events, and others, which is a completely different field from the new sales tools drop-down question explained here.
In no way are you replacing any existing lead source field nor should they be merged. Once the new drop-down has been added, marketing can continue tracking the performance of their campaigns and you can begin tracking the ROI of your sales tools.
This process won’t interfere with anything related to marketing campaigns. It will only improve tracking the sales process and which tools are enabling reps to improve their results.
Whenever I show this method to our customers, they get really excited about the potential for deeper, richer data to track the impact of sales tools on their sales results.Don’t just use your CRM to track #marketing #campaigns. Also, track which tools are enabling #SalesReps to improve their results. @M_3jr. Click To Tweet
Identify Gaps in Sellers’ Knowledge
As discussed, the results of tracking the ROI of your sales tech stack can reveal coaching opportunities to help underperforming reps. However, the data may reveal that the team needs to be trained on how to successfully leverage a tool.
As every sales leader knows, training is an essential part of building a successful team. New reps don’t automatically know the right messaging to use to create sales conversations or convert conversations into meetings. They need to be taught how to overcome objections. They don’t instinctively know the specs to address the concerns of each member of the decision-makers’ committee. Sellers need to be trained on these selling techniques.
The same applies to the tools. In fact, one of my favorite phrases is: “A fool with a tool is still a fool.”
It’s not enough to give tools to your sales team and expect them to know how to effectively leverage them to improve their results.
Do Sellers Know the Best Techniques for Each Tool?
Recently, our CSO Kurt Shaver conducted a review of one company’s LinkedIn® Sales Navigator usage and found shocking results. Because the organization didn’t invest the time to train their reps on how to use the tool and because they hadn’t provided reps specific messaging and templates to use after different trigger events, reps were not using the tool to achieve any results for two reasons:
- They lacked know-how.
- They lacked confidence.
Obviously, their sellers were using the tool ineffectively and did not achieve the desired results.
The company was wasting a $300,000 annual investment because they hadn’t taken the time to train sellers on how to leverage the tool to find, engage, and connect with prospects.
Again “a fool with a tool, is still a fool.”
Use Data to Train Your Sellers
When you track the ROI of your sales tools, the results may reveal this gap in performance. For instance, in the company mentioned above, only a handful of reps were leveraging LinkedIn® Sales Navigator. Those also happened to be the most successful reps quarter after quarter.
The other reps needed more than sales coaching. They needed to be trained on Sales Navigator best practices, proper messaging based on different trigger events, and how to easily identify warm leads. These techniques extend beyond coaching and require training to change behavior.
Another telling example is that of Kirsten Boileau, Global Head of Digital Enablement Services at SAP. Her team conducted an internal study between two sales teams of about 30 sellers each with similar products and sales cycles to determine the impact of training.
Both teams were provided the LinkedIn® Sales Navigator tool. One team was given formal training on how to leverage that tool to connect with prospects and the other was only provided the tool. After six months, the team that had received the training achieved 7x more pipeline than the team that had only been provided the tool!It’s not enough to give tools to your sales team and expect them to know how to effectively leverage them to improve their results. Train your sellers on how to use sales tools and track their performance. @M_3jr Click To Tweet
Leverage Your Sales Tools Today
Computing the ROI of your sales tools helps you in three ways:
- It empowers you to invest only in the tools that are proven to enable sellers to create more meetings, fill their pipeline, and close more sales.
- Once you have identified the tools that provide the highest ROI, you can hone your sales strategy and develop coaching sessions with your team to maximize their contribution to results.
- Your sellers will be actively using the tools your organization invests in, revealing how they use these tools, when they use them, and the attribution of the tools to sales results.
Additionally, the data provides insights for sales leaders to identify coaching opportunities to help underperforming reps develop the skills they need to meet quota. In some cases, the data will help determine if the team actually requires extensive training to learn how to incorporate different tools into their daily cadence.
So what are you waiting for? Go make those required changes now in your CRM to track your sales tech stack and figure out the real ROI of your sales tools!
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