ROO vs. ROI2

By Tibor Shantotibor.shanto@sellbetter.ca

ROO

Everyone is familiar with ROI – Return On Investment, sales people love to talk about, buyers (and their CFO’s), love to hear about it, and even more, love to achieve and validate a return on their investment.  But much like solution selling, after the shine wore off a bit, buyers became more hip to ROI discussions, sellers abused the concept, stating high often unattainable numbers that represented the highest ROI achieved by one or a few buyers rather than the average ROI received by most.  Buyers demanded real ROI calculations, not projected best case scenarios, having been jaded by too many flowery ROI projection, and almost as many misses in outcome.   Buyers now expect, no demand, ROI with teeth.

Perhaps a better measure of return, would be to measure the Return On Objectives – ROO.  While it may be true that return on investment may be a more objective measure of success, people are not entirely objective, unless they are Mr. Spock, but he is not people.  We tend to be more subjective, and as most sales people know emotional.

We’ve all seen people make and rationalize questionable decisions and actions, and when it comes to numbers they have all fudged a decimal or two.  When the numbers add up fine, but if there is a gap, if you are not the lowest cost provider, if it may take a three more months to get pay back with your offering than another, you need to bring other factor to help them make the right decision.

People take pride in achieving, in accomplishing what they set out to do, we have all seen people high five all over the place when they successfully realize what they set out to do.  By bringing in the power of ROO, you can get a buyer to stretch and buy the better more costly, and right solution.

If you can help a buyer exceed expectations in ways that go beyond the numbers, you can enhance the perception of the outcome.  Focusing on ROO gets the buyer emotionally invested throughout the cycle.  From information exchange, to closing, to execution.  When they emotionally invested they will work with you in so many more ways, than when it is strictly down to the numbers.  Especially when expectations around those numbers are missed.

The work is in surfacing the real objectives and expectations, working out the gaps and obstacles they face.  As you remove those gaps, or remove hurdles, the client can see progress towards their goal, and get that much more committed.  That is the work in sales.  Executed right, this is much more powerful than focusing on outcomes you have delivered for others, because it is “their” objectives, not someone else’s.

Let’s be clear, you can’t get away from delivering ROI, or having to demonstrate capabilities and past successes, but tying things to their specific objective, and measuring returns on those will give you the unfair advantage you seek.

What’s in Your Pipeline?
Tibor Shanto

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2 Comments

  1. Stacy Jackson

    Great point: “People take pride in achieving, in accomplishing what they set out to do.” ROI is an unavoidable metric, but it is not as inspiring on the emotional level (unless your ticked off about it!) as the concept of ROO. Positive emotions associated with achieving ROO should impact ROI.

    • Tibor Shanto

      Stacey,

      Positive reinforcement is good on a number of levels.

      Thanks for the input.
      Tibor

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