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Ten Dirty Little Secrets About ROI Analysis

Have you noticed that ‘ROI’, a term formerly reserved for the outcome of an in-depth investment analysis, has evolved to a catch-all buzzword used by sales and marketing people?  Everyone touts ROI to the point it has become meaningless noise to most buy-side executives.  ROI has morphed into another financial benefit waste word along with efficiency, effectiveness, and productivity.  Many sales professionals pull out the ROI wand as if the mere mention of the word carries some magical influence over their customer’s investment analysis.

I’m not suggesting that discussing ROI with your customers is inappropriate.  But I am suggesting that you stop using the R-word if you can’t say something more substantive and quantitative about the financial benefits of your solution.   If you want to improve your relevancy with customer executives, you better be able to engage them in a dialog about the financial impact your solution will have on their business.  This goes way beyond throwing out a ROI number.

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