How to Deliver What the Client Expects

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On a recent trip in the field with a sales rep in Atlanta, we were in the middle of an information/problem-gathering first call. The prospect was a satellite sales and service retailer who sold and installed satellites as well as programming. We asked what kind of a return on investment he was seeing in his current advertising? His response was that he didn't have any conclusive expectations. According to him, the last Radio station advertising failed miserably. I asked him why he thought that, and he responded, "I expected more phone activity." "How much more?" I asked. He didn't know. I pulled out a simple one-sheet entitled R.O.I. Worksheet. Here are the prospect's answers to the following questions - amazing the client with the final tally of only 20 callers needed from his $3,000.

1. Advertising Investment:______________$3,000 (This was the average weekly schedule agreed upon by prospect and sales rep.)

2. Plus 20% return on investment:_________$600 (Wall Street gives you an average of 12%, Bank CDs 6%, so let's give them a little more than if they took their money to their nearest broker.)

3. Equals net return on invesment:__________$3,600 (Add line 1 and line 2)

4. Divided by profit margin:_________________40% (This comes from the prospect. Remember, this is not markup, but margin.)

5. Equals gross return:_______________________$9,000 (Take line 3 and divide by line 4 gives you gross return. This now becomes the total dollars your schedule must return to the client in real dollars.)

6. Divided by average sale:_____________________$550 (Prospect gives you average sale/ticket of product or service.)

7. Equals sales needed:__________________________16 (Take line 5 and divide by line 6 and you get sales needed. Round off the number always.)

8. Divided by closing ratio:_________________________80% (Prospect provides his closing ratio. In this case, it's high since they are caller destination shoppers.)

9. Equals total number of prospects/callers/bodies needed to be generated by your advertising campaign:_______________________20 (Take line 7 and divide by line 8.)