How to Show Your Client the Money Valuate How to Show Your Client the Money

Increased revenue though effective sales Business Results Increased revenue though effective sales

Agenda Introduction to Valuate How Valuate Calculates Value 20 minute introduction to the concepts and the tool How Valuate Calculates Value 40 minute small group work using worksheets to understand how Valuate does what it does Proving the Case 40 minute large group demonstration of how Valuate proves the value of the “Why Pathways” case Summary

Valuate as a Tool Dealership Sales Professionals utilize Valuate to show the dollar value of various solutions

Dealership Sales Professionals More productive and confident financial dialogs with customers Close sales faster Negotiate value rather than bid on price

What is Valuate Valuate is a calculator that helps to tailor your solution to meet your customers’ financial needs

Tailoring the Solution Mike Holmgren just signed a five-year, $40 million contract with the Seattle Seahawks. Question: What is the cost of that contract to the Seattle Seahawks? Answer: It depends

What does it depend on? Cost of capital (interest rate) How they pay it (how much and when)

Example 1 The SS pays Mike $8 million per year over five years Y1 Y2 Total Pay Mike Cost to SS 8m 8m 8m 8m 8m 40m 7.1m 6.3m 5.7m 5.0m 4.5m 28.8m If the Seattle Seahawks invest 28.8 million dollars today at 12% interest, the $40 million contract will only cost them 28.8 million in today’s dollars. So the Present Value of the contract is $28.8 million.

Example 2 The SS pay Mike a $20 million signing bonus and $4 m/year for the next 5 years Y0 Y1 Y2 Y3 Y4 Y5 Total Pay Mike 20m 4m 4m 4m 4m 4m 40m Cost to SS 20m 3.5m 3.1m 2.5m 2.2m 2.0m 33.6m If the Seattle Seahawks pay the signing bonus, then invest 13.6 million dollars today at 12% interest, the $40 million contract will cost them $33.6 million in today’s dollars. So the Present Value of the contract is $33.6 million.

What’s the cost of the signing bonus? Example 2 Y0 Y1 Y2 Y3 Y4 Y5 Total Pay Mike 20m 4m 4m 4m 4m 4m 40m Cost to SS 20m 3.5m 3.1m 2.5m 2.2m 2.0m 33.6m Example 1 Y1 Y2 Y3 Y4 Y5 Total Pay Mike 8m 8m 8m 8m 8m 40m Cost to SS 7.1m 6.3m 5.7m 5.0m 4.5m 28.8m $4.8 m

So What? Say a customer is paying $8 million per year in rent for the next five years. If we want the customer to buy $20 million in furniture and in exchange, we will cut their rent to $4 million per year, will they be better or worse off than paying $8 million per year in rent?

What’s the cost of the signing bonus? Example 2 Y0 Y1 Y2 Y3 Y4 Y5 Total Pay Mike 20m 4m 4m 4m 4m 4m 40m Cost to SS 20m 3.5m 3.1m 2.5m 2.2m 2.0m 33.6m Example 1 Y1 Y2 Y3 Y4 Y5 Total Pay Mike 8m 8m 8m 8m 8m 40m Cost to SS 7.1m 6.3m 5.7m 5.0m 4.5m 28.8m $4.8 m

What’s The Point? We need to be able to prove the value of our solutions to the customer We need to understand the customer’s financial needs so we can structure the solution to meet them Valuate can both show the value and help structure the solution

What’s Next? How Valuate quantifies the dollar value of the solution Application Space Savings Move Cost Reductions Worker Effectiveness Gains Depreciation Tax Benefit

What’s in it for you? Valuate is a calculator. When you can explain how it arrives at the values it calculates, customers will have confidence in you and your proposed solution If you can’t,…….

The Four Drivers - Small Group There are four tables set up around the room At each table, there is a worksheet that will walk you through the calculations for one of the four drivers You will have 25 minutes to complete all four worksheets Afterward, we will put it all together by comparing two cases

In Summary The primary “customer” may no longer be the Facilities Manager We need to be able to gain credibility with individuals at higher and more strategic positions within the client organization Effective use of Valuate will allow your sales professionals to communicate in the language spoken by CEOs and CFOs