Does ROI still matter?
I think everyone has mixed feelings on this one. There’s a famous Gong chart that has been going around since 2019 that says discussing ROI decreases the likelihood of close by 27%. Two years later, Gong published a press release touting their 481% ROI. See? Mixed feelings.
I’m no different. It’s hard to imagine carving out a stance of anti-ROI. After all, isn’t return the whole point of investment? Instead, I think the controversy around ROI is more about what it isn’t than what it is: it isn’t a panacea.
When I was selling at Okta, we used an ROI calculator that (among many other factors) defined the cost of the hours spent by IT on password resets, which is a really good way to quantify the pain of not having SSO. The director of IT looked at the calculation and said “I have to pay these people anyway. You realize I’m not firing them if they don’t reset passwords, right?“ There I was, tape measure in hand, measuring the exact wrong thing. His ROI wasn’t our ROI. His return was what his team could achieve if they got to finally up-level their work from 90% administrative to 90% strategic, and that was far more significant than regaining their wages. In other words, ROI is only “value selling” if ROI is what the buyer values.
Without knowing the true answer, this is my actual guess as to why ROI correlates to lower close rates: if you’re leaning on ROI, you don’t know what your buyer values.
Do you remember back in middle school algebra when you would lose points for forgetting to write your answer without units? (No? Just me?)
Well, ROI is like writing an answer without units. Yes, time and money are good things, but (to companies) they are currency: they exist to be deployed to achieve strategic outcomes. The outcome they value is realizing the vision they’ve already set before themselves, not whatever is pre-set in your calculator.
Sales is about understanding the most valuable return on any investment for your buyer and discovering together how you can fuel that outcome. For as much emphasis as sellers put on uncovering pain, uncovering vision is even more important. It’s extremely difficult to validate and measure “pain alleviation.” It’s much easier to track progress against time-based goals.
The best sellers learn everything they can about their buyer’s strategic vision at every level from the abstract and corporate to the unique and personal, and they align themselves as a lever to empower transformation at every one of those levels.
Financial impact matters, but financial impact is the overflow of the outcome you empower. If you focus on specific strategic outcomes and measure them religiously, ROI will always follow. And that ROI still matters. No mixed feelings.
