When I interviewed 100 go-to-market professionals about challenges and trends in sales (read more about that in my last post), one topic that came up frequently was ROI calculators. In most cases they’re a spreadsheet that the sales team uses in discovery to capture data points about the prospect’s current state (such as containment rates, turnover, etc.) and get an estimate of the ROI the prospect could expect with the purchase of the product. For those familiar with business value assessments, this process fills the role of “BVA-lite”.

Almost every salesperson I spoke with had used an ROI calculator, and the sentiment was overwhelmingly positive. They're particularly valuable in today's market where cash flow is tight. Based on my experience working with clients and conducting interviews, it's clear that startups need an ROI calculator. Here are the top 3 reasons why.

Reason 1: Align Stakeholders on Product Value 

Selling to large enterprises is all about creating alignment across stakeholders. It's crucial that everyone is on the same page about the problem, the solution, and the key metrics that will be impacted by the purchase. A common gap that occurs is a miscommunication between the champion and the budget holder who needs to approve the purchase (usually a head of procurement or the CFO). ROI calculators can fill this gap by providing a framework for formalizing the benefits of purchasing a product. 

While champions understand the value of your product in mitigating their daily struggles, it can be challenging to communicate the same to less familiar stakeholders. For instance, while a tool like Okta will save an IT administrator hours granting a new hire access to applications, a CFO who has never had to deal with such tasks may fail to appreciate the importance of automating the process. When you co-create the business case with an ROI calculator, you can teach your champions how to articulate the value. This enables champions to connect the dots and effectively communicate the value proposition, even when you're not in the room. 

Reason 2: Facilitate Deeper Discovery  

ROI calculators give sales reps a tool to facilitate discussions with prospects and conduct deeper discovery that can lead to bigger sales. A sales rep I know used the questions in his ROI calculator to help a champion realize the full potential benefit from his product–resulting in the deal going from 20 to 200 licenses. 

Asking the right questions also provides data points that can be used to measure value realization in the future. By establishing benchmarks through the calculator's questions, customer success teams can ensure that customers are getting the expected value and reduce the likelihood of churn. This feature can be especially useful during quarterly business reviews or other check-ins with customers. 

Reason 3: Formalize Your Value Proposition

Many individuals I've spoken with have found that the process of creating an ROI calculator yields unexpected benefits. The process brings together internal teams–sales, product, customer success, and marketing–to articulate the value proposition of the product or service. This often reveals inconsistencies or discrepancies in messaging. In the fast-paced environment of startups, messaging evolves on the fly, which can make scalable onboarding a challenge across go-to-market functions. However, creating an ROI calculator offers a structured approach to formalize messaging and establish a cohesive value proposition that resonates with customers.

If you're a founder, head of sales, or go-to-market professional who wants to talk more about ROI, let's connect!