Show Value with a Cost-Benefit Analysis

Learning Objectives

After completing this unit, you’ll be able to:

• Define value drivers.
• Describe how to map business value to value drivers.
• Explain how to build a cost-benefit analysis.

Four Factors That Drive Business Value

To know our customers’ businesses, we focus on understanding their pain points and goals. Once we do, we can figure out what Salesforce services map to their specific pains and needs.  

Account executives use value drivers, or the value a product or service creates for a customer. They use two types to impact a customer's business—primary value drivers and our unique Salesforce value drivers.

First, let’s look at the primary value drivers—increase revenue and decrease costs. You can actually break down that second driver, decrease costs, into two components. 

• Increase productivity and decrease non-IT costs.
• Reduce or eliminate IT costs.

Primary value drivers are a great place to start a conversation with your customer about how Salesforce can impact their business. Starting with costs and revenues is an easy way to reframe your conversation in terms of the value Salesforce brings to your customer. 

Grayson knows Salesforce’s cloud computing platform can save Bloom Decor on IT costs by eliminating the need for on-premises servers and other infrastructure spending, but that’s just the warm-up. Now it’s time to separate from the competition with our unique Salesforce value drivers—speed and agility, and risk mitigation. 

Bloom Decor’s inner circle is always thinking three to five years into the company’s future. They’re a young and growing company that wants to:

• Scale while staying flexible.
• Safeguard their future against downtime and trust issues.
• Think mobile-first, supporting on-the-go field reps who want to work from their phones.

The Salesforce value drivers map directly to the first two goals.

When Grayson demonstrates how Salesforce will grow with Bloom Decor through new product launches and minimized downtime, he speaks directly to their five-year plan for success. 

What about Bloom Decor’s third goal of thinking mobile-first? We’re about to bring it full circle with a cost-benefit analysis.

Cost-Benefit Analysis: Keep It Simple

Meet Safiya, the Salesforce AE who’s partnering with Grayson on this deal. To build a cost-benefit analysis that shows a clear return on investment (ROI) with Salesforce, Safiya picks a few benefits she knows are important to Bloom Decor and uses them as building blocks to show how they add up to much more than the costs. 

Using Grayson’s napkin math from the Build a Value Hypothesis unit and her understanding of what matters most to Bloom Decor, Safiya calculates a simple and powerful business benefit.

With Salesforce, Bloom Decor can expect an increase in:

• Revenue by 8 percent, which is further broken down by their number of salespeople, the average revenue on a deal, and the amount of deals they close per year.
• Productivity, by giving service reps an extra month per year to drive more quota.
• Response times, by keeping their sales and service reps more informed.

Just like that, Safiya shows customer benefits that outweigh costs by three to one.

She’s also hit on a good rule of thumb for building your own cost-benefit analysis: Target a healthy but realistic ROI by showing benefits that are three times the cost. 

Voilà! A simple-to-make, easy-to-read analysis that shows the benefits that really matter to your customer. Remember, implementation is just a one-time cost, and it isn’t necessarily equal to the ongoing license cost. The example above is one possible scenario showing a three-to-one benefit-cost ratio.

You can use the cost-benefit analysis your Salesforce AE creates as part of the final step to value selling: Build your business case.

Resources

Some of the resources suggested in this unit are accessible to Salesforce Partner Community members only.

• Web page (Partner Community login required): Sell Like Salesforce Learning Path