ROI is likely the oldest approach as far as sales books go in providing justification. People are always talking about ROI on the selling side, trying to talk customers into seeing that their product will deliver ROI and therefore should not be constrained by budget. In theory, this is correct thinking. The problem here is, ROI is demonstrated with math, not emotion, and when it comes to really proving there is an ROI, a certain depth in financial experience is needed. Most sales people I know have never analyzed profit & loss, balance sheet, and income statement reports. They understand the real meanings and effects of capital expense vs. operational expense or how full-time W-2 employees differ from contractors when valuations and stock prices and other financial metrics are reported. How can they? If you’ve not worked as a CFO at some point in your life, what is the likelihood you can really show the CFO true bottom line returns on their financials? It would be nearly impossible. So while I hear sales methodologies calling for ROI, I strongly disagree and recommend sales people pick a different tact for demonstrating value.
To be clear, I am not saying it can’t be done. I am simply saying, “It requires some very special training”, not something you’ll learn in a one day class. Car leasing sales people are trained to talk about ROI and do a good job of it, but in most cases they are talking to people who don’t know better. They might get away with it, you won’t. Plus, it’s always a bad idea to base your value on a pitch rather than your ability to actually meet a real need. The first is deceptive and manipulative, the second is honest value.
© 2011, David Stelzl