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Sales ROI vs. Sales Business Case

Sales Training
Chris Orlob
October 25, 2023

The main difference between sales ROI and a sales business case is that sales ROI is a financial projection using hard numbers and projections stemming from an anticipated investment in new software. 

Meanwhile, a sales business case goes deeper than surface-level sales ROI projections. It attempts to build a case for why the decision is a smart investment by articulating the business context, highlighting the pain of inertia, and using savvy financial projections to illustrate the path to a desired business state.

In this article, we explore the individual merits of sales ROI versus a sales business case and explain which is a better fit for your specific situation. 

What is sales ROI?

Sales ROI, or return on investment, is an important business metric that helps quantify the impact of software investments on company revenue and profit. 

Executives, such as CFOs, use sales ROI analysis to assess whether or not to proceed with a large investment and whether it will deliver top-line results that justify spend.

Quantifying business pain: The essence of sales ROI

Quantifying business pain is the process of putting hard numbers on business inefficiencies or undesired outcomes. 

This helps in two main ways:

  • It allows you to build a business case by demonstrating the cost of not using your software, making it easier to secure the deal.
  • It helps customers fully understand the magnitude and scope of their business problem, which aids in prioritization and increases the urgency and scope of the deal.

How to quantify business pain:

  • Start by asking the customer which metric is suffering the most due to the identified challenge, as most metrics have financial implications.
  • If the metric doesn't directly relate to financial value, dig deeper to find the underlying metric that does. For example, if the challenge is low product adoption, the underlying metric could be customer retention, which does have financial implications.
  • By identifying the "metric behind the metric" with financial value, you can make a more compelling case for addressing the business pain and eventually build a robust business case.

Related: 7 Best Online Sales Coaching Programs Right Now

What are key metrics and benchmarks for measuring sales ROI?

It’s easy to calculate the increase in company revenue or profit, divide that by the corresponding rise in sales investment, and call it a day. However, accurately evaluating sales ROI means digging deeper into key performance indicators to gauge the effectiveness of a sales program. 

  • Customer Lifetime Value: This metric sheds light on how much a customer is expected to spend over the lifetime of their engagement with your company. For example, are your salespeople closing one-off deals worth a fixed amount or monthly retainer deals where a client is expected to continue the engagement for a year or more? 
  • Conversion Rate: What’s the ratio of sales calls to deals won? SaaS benchmark conversion rates from opportunities to sales hover in the 25 - 30% range, so if you notice that your salespeople are only converting about 10% of demo requests to deals won, that is an opportunity for improvement.
  • Churn Rate: The rate at which your customers cancel is another metric worth analyzing closely. A churn rate of 5-7% is considered acceptable in SaaS, anything higher and you’re looking at either an ICP misalignment or a scenario that necessitates ongoing investment in building a sales pipeline.
  • Customer Acquisition Costs: An overlooked sales ROI metric is the amount of money spent in attracting and converting the deal. This requires a solid understanding of unit economics i.e. the breakeven number of a single client and costs of things like ads, content, and time of engaging sales reps.

What is a sales business case?

A sales business case is a deep dive into a new project or investment. It typically helps highlight the key considerations why a company should commit to a new way of doing things or a specific software suite by tying it back into key goals and profitability. 

The importance of a well-structured, compelling, and persuasive sales business case cannot be overstated. Consider that the average sales cycle in SaaS is close to 3 months — this means any purchasing decision involves multiple stakeholder conversations, technical analysis, and objection management.

How to build a sales business case

Let’s illustrate with an example. We’re building a sales business case for a product adoption platform that’s preparing for a conversation with an interested prospect. 

First, the context of the deal:

Company: Platform that boosts product-led growth (PLG) by offering guided app tours, in-app notifications, user analytics & behavior tracking, onboarding flows & more. Similar to Intercom, AppCues, WalkMe, and Userpilot.

Prospective Client: Series B startup struggling with high churn and a lack of focus on expansion growth channels. It wants to boost MRR significantly to unlock a Series C round while maintaining or improving existing valuation.

The prospect is eyeing a platform to assist with upsell and cross-sell opportunities within its existing customer base. It also wishes to reduce churn by way of better onboarding and product adoption workflows. 

How should the salesperson build an ironclad sales business case? 

Step 1. Touch Upon The Relevance and Urgency

Starting with relevance and urgency helps set the stage for why a buying decision needs to be made now, rather than later. That’s crucial for boosting close rates. 

Example:  Macroeconomic headwinds have dampened investor climate and capital markets are drying up. The kind of growth needed to unlock a $100 million series C has increased dramatically from the past year and the client needs to double MRR growth to close the round.

Why This Matters: A salesperson highlighting the situation uses vivid storytelling to make a compelling case. The hook here is how relevant the situation is — capital markets have dried up and the zero-interest rate phenomenon is well and truly dead. 

Yet, the company expects to close a $100 million fundraising round which many investors don’t have the appetite for..

It’s this sense of conflict that forces the prospect to sit up and take notice. While they might already be aware of the situation, an external party highlighting it in such cut and dry terms gives them the impression that this person knows what they’re talking about. 

Step 2. Craft a Problem Statement

The problem statement frames the problem your customer faces in language that aligns with your solution.

Example: MRR growth is flatlining despite aggressive marketing spend to acquire new customers. An increase in churn means only 68% of customers renew their contracts, resulting in $5 million lost annually. A further $21 million in expansion pipeline is ignored due to an outsized focus on increasing the net customer base rather than upselling existing customers. 

Why This Matters: Quantifying the problem and showing hard numbers helps agitate the problem. It’s a clear understanding that the current approach isn’t working and something needs to change to get to where the company needs to be.

A well-written problem statement signals an understanding of the company’s unique issues and highlights that the salesperson has done their work. That’s a key driver of trust. 

Step 3. Building the Bridge

The next step illustrates how your prospect can evade their nightmare scenario with a subtle mention of your product being the key enabler. 

The best way to do this is by creating a logical path for the prospect, sprinkling the salesperson’s unique insight into the situation.

Example: Companies who avoided down rounds in this economic climate concentrated less on top line growth and more on building gross and net revenue retention numbers higher than the industry average. Since the main driver of NRR is 90-day adoption and user activation, the focus should be on accelerating the time to value and aiming for an NRR figure of 110%.

For this, we recommend:

  • Ungated versions of premium features to engage senior management
  • In-app triggers to activate customers and display more product capabilities

Why This Matters: The best sales business cases script specific paths to achieving a dream outcome. In our case, the salesperson is exhibiting their unique understanding of the market and why the prospect should focus less on topline (net-new) growth and more on the expansion & upsell opportunity to successfully close the Series C round. 

Step 4. Forecast Scenarios

Executives, specifically CFOs like to think in situations and sensitivities, and operate on risk-adjusted outcomes. 

It’s very unlikely that a business will hit all its projected numbers. A salesperson will lose credibility if they present a single number — a straight ROI projection without taking into account scenario and situation modeling.

A sales business case must show that there’s been some thought into real-world scenarios. There’s no guarantee of a specific outcome, but a few different ways it could turn out. 

Example: Depending on the path that we take, here are three different scenarios that the company could reasonably project.

A situation analysis like this shows three outcomes:

  • No Action: Projections if the company doesn’t change anything and proceeds with its current state.
  • Base Case: A reasonable projection of what the company can expect if it purchases the product adoption platform.
  • Best Case: A stretch goal grounded in reality, if all systems and stakeholders are mission-aligned and execute perfectly.

Why This Matters: One of the key personas your sales business case will speak to are executive decision makers. This could be the CEO & CFO — and you can bet that they’re going to want to understand forecasts and possible directions the business can go in.

The purpose here is to gain credibility through situation modeling. You’re speaking directly to key executives, giving them the impression of a trusted advisor as opposed to a run of the mill salesperson. 

Step 5: Point to Dependencies

The last stage of a sales business case is discussing what needs to be refactored internally for a successful outcome. This takes the conversation beyond just the average contract value and explicitly outlines what additional resources are required. 

Example: In addition to an investment of $XX,XXX over 2 years, we’ll need the following internal resources to help with onboarding, integration, and training:

  • 25 hours from product marketing to update messaging, help docs, and sales collateral.
  • 3 hours per customer success manager for product training.
  • A dedicated leader / point of contact for engineering, product, and customer success teams.

Why This Matters: The dependencies section helps tie everything together. It’s directly linked to the previous section — Scenarios. The difference between a ‘Best Case’ and a ‘Base Case’ scenario is dependent on how well all stakeholders are engaged in the new process.  

This section is also a key differentiator between elite salespeople and average ones. It’s certainly burdensome from a sales perspective as the re-allocation will come at a cost — but it’s a confidence-building measure necessary to affirm the trusted advisor's perception.

👉 Download your free sales business case template

Sales ROI vs sales business case: Which one should you pick?

As stated earlier, the difference between a sales ROI and a sales business case is that sales ROI is a financial projection of expected outcomes, either in revenue expansion or cost savings, anticipated from a new software or process investment.

A sales business case is a refined, sophisticated analysis of a business’s current state and the expected steps to get to its ideal state. It dives into specific pains and pathways of alleviation as opposed to airy projections like ‘increased efficiencies’ 

The two aren’t mutually exclusive, however. Let’s show you how combining the two is the best course of action for your sales team.

Related: How To Master the SaaS Sales Process

Combining sales ROI and sales business case: The fast lane to winning seven-figure deals

C-level executives hate being sold to. They’re busy folks with little time to spare — and they’re certainly not interested in learning how cutting-edge your latest features are.

So how do you win their trust and close a sales opportunity?

Let’s take you through a real-world case that combines both elements.

Customer: Mid-market B2C privacy tech company that’s looking to switch up its legacy CMS. The current system has a ton of technical debt that’s bloating the website, hurting SEO and conversion rates, and is tedious to manage.

New pages cannot be built without being hard coded by front-end developers, which impacts the productivity of all core teams such as marketing, product, and engineering. 

The website gets 1 million visits a month and the current MRR is $750,000. The senior executive team is weighing up its options but strongly prefers a lightweight CMS that allows multiple collaborators, pre-built elements, and can supercharge the existing publishing cadence from 7-8 new pages a week to north of 50.

The executive team fears that rival companies are fast outflanking them in terms of publishing velocity and keyword rankings for high purchase intent searches. They wish to become a category leader in the space and desire a lean, agile approach to new marketing campaigns.   

Pitching Company: Headless CMS provider that offers a no-code visual builder. Track record of helping content teams scale and build immersive experiences proven to rank well on search and convert curious prospects. Similar to Contentful, Sanity, and Agility. 

Here are the 5 key elements that an effective pitch should encompass.

1. Start by explaining the cost vs projected return

Any sales deck will include a slide on how much a project will cost and what its expected return looks like. 

For example, our CMS in question is priced at $100 / user / month. The company is looking for an initial 50 seats, intending to increase that number to a hundred in six months. There’s also some customization work required on the back end, which has a one-time cost of $25,000.

Contracts are renewed yearly, with the expectation that the engagement will last a minimum of five years.

The expected contract value is in the range of $175,000 on the conservative end to $325,000 all-in. 

A novice salesperson will approach this deal by crunching a few numbers that relate to a hypothetical boost in conversion rates and SEO rankings, point to increased sales, and state the expected ROI number.  

An expert salesperson will take that number as the end goal and use the rest of the conversation to build a bulletproof business case showing exactly how to get there. 

2. Break it down into time progression

As we said, it’s not enough for a salesperson to say that you’ll get X in exchange for Y.

The privacy tech company is expecting to use this CMS system for at least five years, potentially more. The CFO wants to know when they’re going to see a revenue lift and how quickly that’s going to impact the bottom line.

A time progression breaks down the expected ROI into tangible outcomes and milestones. 

A common complaint from CFOs is that they pitch high ROI numbers several years into an investment when the business climate and operating conditions can change dramatically.

A winning pitch would break down timelines like this:

Phase 1: Onboarding & Training

The current marketing, design, SEO, and dev teams need 15 hours of training time per person to understand the intricacies of the software. That’s an initial headcount of 50 people and a total training outlay of 750 hours.

The total time required to finish training is expected to be two weeks.

Expected ROI: Negative $60,000 based on loss of productivity and software dwell time.

Phase 2: Website Migration

After the initial training and onboarding period is over, the first big project is to migrate the existing website onto the new headless CMS. This will be done in two phases: the initial phase involves migrating the homepage, all core service pages, and helpdocs. The second phase is to migrate the blog.

The total number of pages impacted is nearly 25,000.

An estimated 250 engineering hours are required to complete both migration phases, with a plan to finish the migration in an additional two weeks. 

Expected ROI: Negative $35,000 based on loss of productivity and software dwell time.

Phase 3: Initial Ramp-up

With the core teams fully onboarded and the website migrated onto the new CMS, the next phase involves building new pages and blogs at a scale that’s double the rate of the legacy system.

The website conversion lift is projected to be 50 basis points or 0.5%.

Based on consistent traffic numbers, we expect the website to convert at 2% from the existing 1.5%.

Phase 3 is projected to last for six months.

Expected ROI: Positive $75,000 based on an average monthly contract value of $42.50.

Phase 4: SEO Liftoff and Publishing Velocity

We expect improved page load speeds and the lightweight website to result in better core web vital scores. These positive signals to search engine crawlers should impact rankings for high purchase intent sales pages, thereby reducing PPC expenditure and boosting organic signups.

Phase 4 is projected to last 12 months.

Expected ROI: Positive $295,000 based on ranking improvement of 35% across high-priority keywords and reduced ad spend. 

Phase 5: All Systems Functional and Optimized

It’s projected that years 3, 4, and 5 will provide the biggest lift to the company’s bottom line.

Legacy employees would be completely in sync with the new process while new hires shall be trained as part of their onboarding program. 

With the freedom to build new content experiences at scale, all core teams can pivot to a lean and agile approach to marketing campaigns.

Improved UX, website topical authority, and brand uplift will result in an optimized growth flywheel, enabling the company to establish itself as a leader in the privacy space.

Expected ROI: An additional $1 million ARR each year.

3. Build a monitoring and tracking function

One of the most impactful things that sales executives can include in their pitch is a system that monitors whether execution is on track or not. 

This is known as a mutual success plan and outlines what happens from signature to realized value. It aims to hold parties accountable at each step so that the CEO or CFO can check if execution is on track.

We recommend creating a spreadsheet with events, dates, accountable parties, and success measurements for each phase to fulfill the monitoring and tracking requirements.

The time progression step articulated specific goals and outcomes for each phase. The monitoring and tracking spreadsheet combines this into a single source of truth, assigning the success of each phase to a specific person or department.

For example:

  • Phase 1: Project managers assume responsibility for assigning training tickets in Jira and monitoring that non-critical projects are kept on hold until the training is marked as complete.
  • Phase 2: Head of engineering to champion website migration in close collaboration with the SEO Lead.
  • Phase 3: The Director of Content and the Design Lead manage the initial on-ramp to ensure new pages are built in a manner consistent with the updated workflows.
  • Phase 4: The Head of Marketing Ops and the SEO Lead track the publishing velocity of new pages, ranking movement, signups, and PPC spend while reporting progress in an internal bi-weekly marketing report.
  • Phase 5: All C-suite executives are tasked with setting new OKRs for team leads while strategizing on expansion hires and new growth levers. 

4. Enable the internal champion to advocate for the sale 

An internal buyer champion is the first person who’s advocated for your product or service within the prospect’s company.

They’re usually a power user of your product and the ones struggling the most with the old workflow. 

In our case of the privacy tech company, the buyer champion is the Director of Content. He’s struggling to meet his OKRs of net new pages published and website traffic growth due to the legacy CMS that inhibits scalability.

As such, he’s been shopping around for an alternative and has communicated this need to senior executives who are now on board with the urgency to migrate to a new system. 

But the salesperson for the headless CMS company isn’t familiar with the exact data and internal struggles faced by the prospect. Working with the champion, they understand the key structural issues:

  • Clunky legacy CMS doesn’t allow content strategists and designers to build new pages without engineering help.
  • Hundreds of poorly optimized legacy pages contribute to massive technical debt, nullifying SEO efforts.
  • Publishing a page requires input from four different teams.
  • Impossible to add website popups, lead gen forms, or capture email addresses for the newsletter.
  • No way to include self-hosted videos inside blog posts and service pages; YouTube is not an option due to privacy concerns.
  • Productivity of new hires is stifled due to technical limitations, with no clear solution.

The best salespeople work with the champion to understand these problems and map a solution to each inside their pitch. They also arm the champion with case studies, ROI figures, and insights into onboarding and training assistance to help them advocate for the deal with key executives. 

5. Internal commitment and signoffs

CFOs don’t care about the gross financial return of a sales ROI pitch. Their key consideration is the net positive impact on the profit and loss statement. 

So if your new product or service is projected to add $250,000 in gross revenue but requires an additional headcount of two individuals costing $250,000 in wages, that’s a net impact of zero. 

That’s unlikely to impress the CFO or result in a sale. 

In our case, we’ve highlighted how the proposed CMS will reduce paid ad spend and lead to improvements in key areas without requiring additional overhead.

However, not all business cases are the same. For example, it’s impossible to utilize Salesforce to its full potential unless there’s a member on the team with the core skills required to make it work. This may necessitate a new hire to achieve the optimal ROI outcome.

In such cases, the internal champion must commit to dialing back on other areas of their budget to satisfy the CFO and provide the impact to profitability that they expect. 

The Bottom Line

In today's highly competitive and outcome-oriented SaaS market, sales cycles have evolved into meaningful dialogues where adept negotiation and thought leadership skills are imperative.

High win rates were a zero interest rate phenomenon — companies had the budget to spend frivolously but the economic climate has changed.  Today’s savvy sales executive is a business expert who displays a comprehensive array of strategies from the art of showcasing value to dealing with objections and concerns. 

Pclub’s sales demo training instills a sense of confidence in your sales team and enables them to convert prospects at a higher rate. We guide them through the process of how to structure great sales demos using a repeatable and winning formula.

You’ll learn how to create sales demos that win and what to do and say when things aren’t going your way. 

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