Given my background in finance, I always bristle when I hear someone mention the phrase ROI (Return on Investment), particularly when it relates to a sales situation. The term ROI has become one of the hot buzzwords in the past several years and everyone is using it to“negotiate” when they’re buying something for their business. In most cases, this is a battle you can’t win.
To properly calculate a ROI, you need to have actual numbers you can track starting with dollars invested and be able to show a direct correlation to increased profit (either due to increased sales or reduced expenses). This direct correlation is often hard to draw.
For instance, let’s suppose you are in the wellness business and your product involves training employees to make them better patients. In theory everyone can agree that a better educated patient who is trained how to communicate and interact better with healthcare professionals will lead to better compliance and thus better health outcomes and therefore lower healthcare costs. But if your training service is one of four “wellness” initiatives your client is using, how do you know which one of those initiatives is responsible for the increased profit?
The same holds true for many other companies, particularly professional services (e.g. marketing/advertising, attorneys, consultants, etc.). Engaging in this discussion as part of your sales effort will not only result in a lot of frustration up front but will also most likely become the source of great animosity in the relationship going forward as you (and others) try to defend your position using the same positive results.
I’m not advocating that you shouldn’t focus on the benefits delivered by your products or services, I’m just cautioning you on trying to quantify all of these items. After all, how do you calculate the ROI on a little nugget of information that helps solve a challenge your client has been facing for years or alters their paradigm in such a way that they never see business or the world the same way again? Isn’t that pretty valuable?!?!