The First ROI Calculator—Part Two

If you’d like to skip right to our free ROI calculator, click here.

First off let me apologize.  I promised I would write the second part of the ROI Calculator Blog series the week after the first one (two weeks ago) but the Holiday spirit overwhelmed me.  I am now back in the iSalesman saddle and ready to have a great 2015…..Happy New Year!

In Part 1- Pencil Selling, I talked about my experience as an IBM Sales Rep and learning about and using Financial Selling skills with clients.  The challenge was mainly about developing confidence to use this approach with a client, and when I did I became that much more successful as a sales person and a better provider for my growing family.

After a couple of years at IBM I was recruited by AT&T.  This was back in the early 80’s when AT&T was being broken up by the DOJ and becoming de-regulated.  AT&T put on a full court effort to acquire professional sales people.  Quickly, and with a lot of money, they established several sales universities and I attended the one in Cincinnati.  Here we once again focused on the art and science of selling.  As this was all new, AT&T was also looking for input from those of us that had selling experience with large companies.  I strongly recommended a focus on Pencil Selling (aka Financial Selling, aka ROI Selling).  In two short weeks while we were there AT&T developed a Cash Flow Model that was available via computer.  Surprisingly it was an easy to use tool that showed a client the advantages of upgrading their Telephone Equipment from old and dated Analog stuff to new and sexy Digital equipment.  No more Pencil Selling!  No more #2 Pencils!  We had access to all of our customer’s records and could input the data from the comfort of our office, get the print out and run out to see the client.  AT&T’s Cash Flow Model not only included Cost Savings, but also a 5 –Year Cash Flow, The Payback Month and the Return on Investment (ROI).  All the terms I remembered from my college days.

Once again I saw the magic of selling with numbers.  We sold some large sales.  I couldn’t sell enough Digital PBX’s to Xerox and made a huge sale to Combustion Engineering up in Windsor, Ct…

After several years I was recruited to join MCI, an emerging AT&T competitor that would later shake up the Telecommunications Industry.  MCI was one of those rare opportunities that every salesperson should have the pleasure of working for.  The Value Prop of MCI was obvious, the sales quick and large and the commissions huge.  In my first 5 months at MCI I made more money than my best year at IBM or AT&T.  As much as I became an ROI Selling acolyte I have to admit that this was rarely used.  The MCI Value Prop was so compelling and the cost savings so huge we mainly focused on Relationship Selling and sheer sales aggressiveness.  Literally more calls meant more commissions.  When I presented the MCI Solution to a high level client in Houston the savings were so huge he asked me “what’s the catch?”  The answer, I told him, was your current provider could have done the same thing for you two years ago.  It was like kicking a hornet’s nest.  I watched the client turn beet red then turn to the Telecom Manager and say “give Carl all the 800 Business too”.  That was a $75,000 Commission check!

So ROI Selling has its proper place.  In the case of MCI it would only have slowed down the sales freight train.  The lesson here is to use what you need to get the sale.

In 1999 a rascal named Bernie Ebbers decided he wanted to buy MCI and named the new company MCI WorldCom.  All seemed good but another company named Equant recruited me to head up sales in North America.  Good thing I joined Equant as everyone can recall what happened to MCI WorldCom.

Equant was a Dutch owned company who was the first Telecom Company to offer Internet Protocol (IP).  This was for data only (voice didn’t sound good then).  During my first sales visits with clients I found myself having to explain what an “Equant” was before I could explain what we do.  I sure missed not having that company name recognition!  This didn’t look like another MCI type home run.

As the Equant solution was totally unique from the Big Telecom Providers (AT&T, Sprint, MCI, etc.) we had to explain the differences to our clients between our IP Data Solution and the big Telecom Provider’s legacy point to point network services.  From my view I could see that our sales cycles were long and we had difficulty presenting the benefits of the Equant solution.  First of all it was more expensive than the Big Telecom solutions.  We would win a sale here and there but nothing exciting.

At the end of the first year I decided to dust off the ROI Selling model and see how it applied to the Equant solution.  As the Equant IP Solution created other benefits than the Big Telecom Providers we decided to identify all of them and quantify them.  The Equant solution provided built in Firewalls and was a “Managed” service meaning the client did not need to watch over the service as they did with the Big Telecom Providers.  Also, with the Equant network every location connected could communicate with every other location.  The Big Telecom Providers would have to install a network line between every location to match this.  The expense to doing so was prohibitive.

Partnering with Marketing we hired a firm to build us an ROI Calculator.  We now were using laptop PCs.  We could now sit down with our client and ask them questions related to quantifying all of the benefits.  Now the numbers started to add up and we could see that the benefits far outweighed the cost of the Equant network.  So, on the surface Equant’s price seemed high, but when you weighed in all the quantifiable benefits the client could see that the Equant solution was better.  Some of our clients included the output from our ROI Calculator into their internal Business Case for Budget Approval.

With this new ROI Sales weapon we were able to close some large deals with large Fortune 100 Companies with the largest being with EDS.  I don’t usually share personal finances but that was my first seven figure commission year.  Wouldn’t have happened without the ROI Calculator.

What happened to Equant?  We were bought by France Telecom.  I left to have a new adventure but Equant went on to become Orange, a very large European Telecom company.

In the forthcoming concluding blog on the subject of ROI Selling I will introduce the iSalesman Financial Selling Course and the iSalesman ROI Calculator.

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  1. Kevin Sexton

    An approach that every salesperson should utilize in today’s competitive environment. This approach impacts the client perception of you as more of a partner/consultant rather than salesperson, which enables building a long term relationship and clearly gives you a competitive advantage for future sales.