Redefine ROI and win business faster with this new ROI framework

Not redefining ROI yet? There's still time to embrace a new understanding of ROI that could impact 2023 sales.

At least once a week, a revenue manager at a B2B company gives us a version of one of the following statements:

"Our sales are blocked by the CFO/CEO because we can't show ROI.""Our pipeline has stalled and we can't do it moving forward."< /em>"Retention is terrible because we can't prove value at renewal time.""Deals we thought were safe things didn't come to fruition not or they take forever."< /em>

According to our research, 60% of businesses struggle to show ROI. This struggle is the main reason why pipelines do not close, renew or expand. Business leaders are stuck with outdated, limited, and limiting definitions of ROI that may not fit their business model. And without ROI, your presentations, demos, and dinners are no longer enough to convince CFOs and CEOs to pull the trigger in a slowing economy.

Source: GTM Partners

The good news: there is still time to deepen our understanding and execution of ROI before the end of the year. Companies that can demonstrate ROI will be more likely to close business and retain customers.

What you will learn in this article: Why Most Companies Struggle to Show a Directly Attributable ROI Five Types of ROI Companies Can Measure with the New ROI Framework Ways to Solve Sales Problems with Credible, Third-Party ROI Studies How G2 Clients Can Leverage ROI Deliverables The oversimplification of the old ROI framework

When most people talk about return on investment, the most common definition is net income divided by the total cost of the investment multiplied by 100. If you spend $10,000 on something and it generates 123 $000 net new revenue, ROI is 123%.< /p>

"This narrow definition of ROI is burdensome for companies that are part of a complex solution or struggle to show a directly attributable ROI."

Sangram VajreCo-founder and CEO of GTM Partners

Does that mean your solution is worthless if you can't unequivocally prove that you're earning more than you cost?

Here's an example: A large retailer pays three vendors as part of an effort to improve their e-commerce site. One is a Customer Satisfaction Measurement Provider (CSAT) for $50,000, another is a UX Auditor for $30,000, and one is a Customer Journey Consultant for $75,000.

All three identify and prioritize the cart abandonment process. Changes to the customer experience by the internal development team result in $6.2 million in net new sales in the quarter following the relaunch.

All three vendors and the internal team want to be credited for new revenue, but it's impossible to isolate the influence of a single element. Not being able to calculate directly attributable ROI doesn't mean they weren't all helpful.

What about a company that completely transforms the...