The Value in ROI

One of the many things that I have learned over the 12 plus years of working with thousands of businesses is that most people underestimate what things cost. Whether we are discussing day-to-day expenses (gas, food, stuff) or looking at major purchases (houses, cars, stuff) our expectations usually fall short of reality. I have often wondered why we hold to the idea that life is more expensive than we would like it to be.

Part of that explanation, in my opinion, is that most prices are somewhat hard to find. Unlike gas, which is posted on many street corners across the country (and some other parts of the world), there is no consistent posting of prices for most of our main life purchases. This tends to lead people to ask friends, family, and neighbors before shopping and inevitably uncovers that one person that has found the most value at the cheapest price, laying the foundation of our overall expectations. We all love a good deal and are ready to believe that good deals can be had at a minimal cost.

Yet all of us understand that most likely we will need to pay more in order to get more value. This dynamic tension that exists in our consciousness creates a sometimes paralyzing approach to buying. This laser focus on cost most times keeps us from benefitting from value that can be life-altering. What most people really want is a Return on Investment (ROI). The difficulty that comes with a focus on ROI is that it requires math. And nobody told us there would be math in our day-to-day lives (well they did, we just didn’t want to believe them).

The businesses that we coach are required to use math. We make them use it from the day we meet them all the way through our relationship. We do this in order to help them understand the ROI of coaching because left to their own devices, they will not do the math. By explaining the projected ROI before we take them on as a client to monthly meetings to compute the actual ROI, we help grow their businesses and themselves.

So next time you are making a buying decision, calculate your expected ROI. Take into account both money and time, along with how you feel after the purchase is complete. Share your expected ROI and see if there is a value match. Keep looking until there is. By using ROI for your purchasing experiences, you will be better able to find that value you are looking for and the business that can deliver.

By: Tom Palzewicz

katapultThe Value in ROI