In tough times, buyers want a sure thing. Buyers analyze what they must sacrifice and what they will gain, and they want to be sure that what they are risking is worth the reward. However, very few sellers can demonstrate with certainty the dollar impact their solution will have on the customer. It’s easier for a buyer to compare the price of two options because the price is straightforward, but the impact is not. The greatest challenge in tough times is not in communicating the value you deliver; it’s quantifying the impact.
Think of three ways that your solution adds value for the customer such as customer service, quick response, and quality. The customer likely would agree that these three value-added extras are important, and they bring real value. It is not a question of if those value-added extras are valuable. It is a question of how valuable. Through tough times, it is not a question of whether you bring value or not, it’s quantifying the impact. Most companies do a superior job of creating value, but are unable to quantify the impact on the buyer. Value that is not measured is less relevant and less impactful. The less tangible the cost savings are, the less perceived impact it has on the buyer. The key is to quantify the value you deliver.
During tough times, buyers make decisions under a microscope. Decisions are scrutinized and must be justified by the individuals making those decisions. Imagine you are a manager deciding to switch providers. As you onboard the new provider, other employees want to know the reasoning behind the decision. When this decision is questioned, there must be proof of the tangible results the company gains. Tangible impact provides the buyer with the proof they need.
You may believe that most of the value delivered is implied, but it may not be perceived by the buyer. Since the value is implied and less tangible, the buyer doesn’t think much of it. For example, you demonstrate your solution, and the cost savings are implied in your solution. Your solution reduces labor costs, but you have no hard data showing the dollar amount. Your value-added blends in with every other competitor promising to do the same.
What if you quantified the value of your solution? Let’s say you research your solution and calculate an expected labor savings of 10 percent. If the customer budgeted $100,000 of labor on this project, you could calculate the hard savings. Your value-added solution will save the customer $10,000. In this case, your time savings are tangible and real. That $10,000 is like pure profit to the buyer’s bottom line.
In other instances, the value you bring is less tangible. For example, say you offer complimentary training to help workers become more productive, however, you have no real data that shows specific labor-saving figures. Although the customer agrees that your training is a benefit, there is no hard figure to make it tangible. The same is true with customer support or any number of value-added extras. In your presentation, the goal is to quantify your value and make the impact tangible. The best way to quantify your value is to conduct an impact audit.
Through tough times, buyers scramble for ways to cut costs, streamline processes, and gain efficiencies. Tough times often act as the catalyst for buyers to change and cut costs. Buyers become painfully aware of their internal processes as they hunt for ways to eliminate waste. There could not be a better time to conduct an impact audit. This process involves analyzing the buyer’s business and assessing all the ways your solution will impact them positively. Your request to conduct an impact audit will be timely and relevant to their needs.
To begin this process, identify all the ways your solution impacts the buyer. This requires an in-depth understanding of the customer’s business. There are two ways to quantify the impact of your solution: the cost that you help the customer save, and the profit that you help the customer gain. Following are two examples demonstrating both.
Let’s say that you are selling new technology to a consumer products company. With your solution, the customer can reduce the time from product concept to product launch. This consumer product company is launching a new brand that is expected to generate $120 million in revenue its first year ($10 million per month). Your automation software package would decrease the time to market by three months. That means your solution enables the buyer to earn an additional $30 million in revenue. That $30 million gain is the impact.
You also can quantify what the buyer is currently wasting. Through tough times, buyers are keenly aware of what they sacrifice. In many cases, what a buyer gives up or sacrifices is more compelling than what they gain. Your impact audit can spotlight what the buyer is losing in the way of productivity or waste.
In one of our training seminars, a seller shared their example of reducing loss. During the Great Recession of 2008, a seller was convincing a buyer to replace their current tool fleet with cordless tools. The seller explained to the business owner that they were wasting too much money on extension cords, but the buyer was not convinced. The seller then quantified what their current tools were really costing them. The seller went to a jobsite and calculated the time laborers spent looking for extension cords and open outlets. He even got his stopwatch out and conducted some field testing. The results were compelling. In one instance, it took a laborer more than 30 minutes to find a cord, get set up, and drill a hole. The brutal part is, two other guys were waiting around for the laborer to drill the hole. In total, that was 1.5 labor hours. At a dollar per minute, that one instance cost the customer $90 in productivity. Once the seller quantified what the tools were costing the business owner, he was ready to switch. Losing that $90 in productivity was more painful than investing in cordless tools.
Regardless of whether it’s a potential gain or reducing a loss, the key is to quantify. A tangible loss or gain is more compelling than the unknown gain. When you are selling in tough times, every dollar counts, including the dollars you help the customer save. Too often, sellers lead with their value, but fail to quantify how that impacts the buyer. The dollar impact of your value provides the proof and certainty a buyer needs to take on the risk of changing in tough times.
Paul Reilly is a speaker, sales trainer, author of Selling Through Tough Times, available fall of 2021, co-author of Value-Added Selling, fourth edition (McGraw-Hill, 2018), and host of The Q and A Sales Podcast. For additional information on Paul’s keynote presentations and seminars, call 636.778.0175 or email paul@reillysalestraining.com. Visit tomreillytraining.com and signup for their free newsletter.