Gerald Miller GG Senior Partner
Why will I spend money on your product or service, unless you can show me some idea of the economic benefit?
How do you convince the person to spend their money and invest? My expert opinion is work with them on potential economic benefits, quantifying them with assumptions that dollarize the return on investment so it can be justified. Why is this not done more often? The number one reason I hear is there is not “bullet Proof data” for the assumptions, therefore, we can’t back up the claims. Read on and I think you will see that the very exercise of you and your prospect walking through the exercise will get you a more in-depth knowledge of the benefits and the business reality. I have found it to be a high value discussion that opens the eyes of sales, marketing, and product managers as well as the prospects.
Let’s look at an example. I am selling an e-learning video system where airplane mechanics can look up the model, and part, and see a video of how to replace that build version with that part. The system will let them via smartphones see them while on the plane or even inside the engine. Let’s brainstorm the benefits, then we will see how to quantify them.
- No leaving the plane to go look-up information with video instruction vs reading. Saves travel time, research time, and the repair is faster.
- Get’s the plane into service faster, could limit experts needed.
- May save operations time by lowering plane swaps, reseating, redoing reservations, fewer delays or cancelled flights.
- Improves customer satisfaction may reduce frustration, complaints, claims, or loss of future business.
Ok let’s start an excel spreadsheet to detail what data or assumptions we think might be a starting point.
What is a number of repair hours they have per month or year? How many planes or flights?
What is the labor rate of the mechanics?
What is the cost of keeping a plane in service per hour or per day?
What is the cost of a cancelled flight?
What percentage improvement in repair hours could be targeted ie 10%, 15%, 5%?
If you do the excel math draft 1, you can now do research and see if data is available, or ask your coach orally in the account. Now schedule a working session to talk about benefit quantification or Return on investment. By walking through math and assumptions get your prospect to tell you what they should be set at. Final version two of the sheet, prepare your proposal hard hitting facts that can be used with the CEO/CFO such as by investing $100K we will see $500 K per year of potential benefits or the payback is 2-4 months, plus the soft benefits. Your credibility goes up as does your value to the prospect.
It also gives you an entry to come back and try with them to measure the improvement such as did you see a reduction of 10% in repair time or hours? Did planes get back in service quicker? Many time they won’t share the actual improvement numbers, but will share they got great results. They then may ask you about their next business problem. You then repeat the same approach.
ROI selling gives you logic and knowledge two powerful reasons on how to win!