The danger of ROI selling

I was talking to a new Consulting Sales Bootcamp client yesterday. During our kickoff call, he asked me about accelerating the sales process with a particular sales opportunity.

In this case, he’s working with a manager who is not the ultimate buyer, but will make the case to the CEO. The manager needs help making the business case, which, of course, is your job as the seller.

Part of the challenge here is to educate someone to sell on your behalf. In these cases, it can be really tempting to sell based on return on investment (ROI). Now, not all consulting specialties lend themselves to this style of selling, but anything that could be quantified could conceivable be sold on an ROI basis.

As fate would have it, I happened upon this article on LinkedIn today from Chris over at Gong.io. Here’s the highlight:

Now, this may seem wildly counterintuitive, but selling based upon ROI seems to hurt the chances of closing any individual deal. In the article, Chris cites rationality as the key driver of why ROI doesn’t work well: it puts your clients in a rational state of mind, and they’re likely to pick apart your ROI calculation.

I’ll be more direct in my critique of this approach: any ROI calculation you create is obviously bullshit. Total fabrication.

No one is capable of predicting the future, and the amount of assumptions needed to create an ROI calculation serve as de facto invalidation of any calculation you come up with. Instead, connecting client stories to the outcomes your prospect wants is much more effective.

Now, you should still be prepared for the obvious objection – ”how do I know if this will work for me?” – but it’s much less of a leap than trying to pin down a specific calculation.

A variation of the ROI approach I’ve seen work well for others is a performance guarantee. Rather trying to pinpoint the exact outcome, you can guarantee a minimum performance, then work your butt off to make sure it actually happens. If you do this, I’ll forewarn you that your discovery process needs to be rock solid so you’re not blindsided by surprises later.

-Liston

PS – if you’d like a deeper dive on when and if you should push the sales cycle, check out this podcast episode: https://liston.io/podcast/ep036-sales-cycle/