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How to leverage ROI throughout the sales cycle (not just in pre-sales)
At least once a week, a revenue leader at a B2B company tells us some version of one of the following statements:
“Our sales are getting blocked by the CFO/CEO because we can’t show ROI.”
“Our pipeline is stalled, and we can’t move it forward.”
“Retention is terrible because we can’t prove value at renewal.”
“Deals we thought were sure things aren’t coming through, or they’re taking forever.”
According to our research, 60% of companies struggle to show ROI.
That struggle is the number one reason why pipelines aren't closing, renewing, or expanding.
Business leaders are stuck with outdated, limited, and confining definitions of ROI that may not fit their business model.
Without ROI, your decks, demos, and dinners are no longer enough to convince CFOs and CEOs to pull the trigger in a slow economy.
The good news—there's still time to expand our understanding and execution of ROI before the end of the year. Companies that can demonstrate ROI will have a higher chance of closing deals and retaining customers.
How to prove your value with ROI
GTM Partners has identified five clear types of ROI. Attributable ROI is the kind we usually think about when we discuss ROI, but in fact, each one of them can be leveraged to close deals, increase renewals, and improve expansion.
The winning zone: Companies that can show Attributable and Transformative ROI are at an almost insurmountable advantage. They’re not going to get cut at renewal time even when budgets do because either they’re transforming how customers do business or they can prove directly attributable ROI. Companies in the winning zone can out-maneuver competitors through big strategic moves and investments.
The competition zone: Vendors in the Efficiency and Necessity ROI zones can be very successful and may even be the category leader. However, they’re constantly battling the competition and defending against other players and newcomers who can easily force competition on features, ease of use, price, and efficiency gains. It’s important to remember companies in this zone can and do win—they just have to be prepared to battle.
The instability zone: Vendors who can only show Indirect ROI are in what we call the muddy middle, where retention gets hammered. In a down economy, CFOs will not approve new or renewed tech that can’t show ROI. Companies showing Indirect ROI get lumped with dozens of other providers as one of many contributors to some final outcome.
Your goal is to move up the slope on whichever side makes sense. If you’re in Indirect ROI, you need to be able to move up to either Efficiency or Necessity. If you’re already at Efficiency, how can you move up to Attributable? If you’re at Necessity, how can you move up to Transformational?
Leveraging ROI across the sales cycle
Our research shows that credible, validated, third-party ROI studies can address many common sales problems. We do ROI studies here at GTM Partners using proprietary research and validated G2 data, but you can also get an ROI study from other analysts; Forrester calls their version the Total Economic Impact study (TEI). We don’t care who you get it from, but make it a short-term priority if you want to influence deals this year. It will help you shorten sales cycles, close bigger deals, get the CFO on board, improve renewals, and increase expansion deals.
Once you have your ROI study, be sure to leverage it throughout the entire customer journey.
Pre-sales and sales: Perhaps the most common use of an ROI study, many companies show their proof of ROI during the sales cycle to prospective buyers. When you have credible, third-party-validated ROI, it can shorten sales cycles and address common objections. Don’t forget to go beyond traditional case studies. Bake your ROI data into demos, testimonial videos, sales decks, and webinars.
Onboarding: Be sure to share ROI from similar customers during onboarding. In doing so, you’re telling your customer what kinds of things to look for and preparing them to experience the same kind of success.
Service: Consider sharing ROI case studies during quarterly business reviews or other strategic check-in points. You may be giving your customer ideas for use cases they aren’t taking advantage of yet, and you may be priming the pump for them to consider their own ROI in the future in ways that will help at renewal.
Renewal: Hopefully, by renewal time, your amazing value and all your relevant use cases are very familiar to the customer. Hopefully, they’ve evaluated their own ROI with your product and are satisfied. But not every customer will have access to business-level data that allows an ROI calculation, so renewal can be a good time to remind them of your proven value to customers in a similar boat.
Credible, third-party, validated ROI studies make all the difference
ROI is more than just money saved or money made. Being able to clearly communicate your ROI to customers and prospects will transform your GTM strategy. You will almost instantly improve your win rates, boost NRR, and shorten sales cycles.
Our research shows that credible, validated, third-party ROI studies can address many common sales problems. Most analyst firms, including us, do some version of an ROI study. We believe in ROI so much that we want you to get one no matter where you get it; it doesn’t have to be from us.
Our Process
Tell us your top use cases and value propositions.
We read select case studies or customer videos provided by you.
We mine G2 review data to validate your use cases and value props.
We produce a credible, validated, third-party document that you leverage throughout the customer journey.
Here are summaries of some of the ROI studies we’ve done for GTM technology vendors.
If you’d like to discuss how we can help you show your ROI, book a meeting with our analysts.
Have a great last week of July,
the GTM Partners team
P.S. few quick announcements
If you haven’t already signed up for our July 27 Virtual Summit on the impact of generative AI on GTM, do so here. Sign up even if you can’t stay for the whole afternoon, that way you’ll get sent the presentations and recordings.
Pavilion is hosting it’s first GTM awards. Nominate yourself or someone else before August 15. Awards will be presented at the GTM2023 conference in Nashville in October. We will be at the conference and the award show; Sangram is on the jury!
Will you be at B2BSMX, August 7-9 in Boston? We will be there too. Sangram is leading a session on Monday, August 7 right before happy hour!
