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Sales Solutions
Are You Worth It? vol 5, issue #9
September, 2008

No matter how much your prospect likes your product, they're not buying it in a vacuum.  The cost of your solution - as you've no doubt found out on many occasions - is always an integral factor in their decision whether to buy from you. Your job, as a sales professional or business owner, is not just to convince your prospects that your offering is the one that best meets their needs.  You must also convince them that it's the one that provides the best value.  That's because most prospects subconsciously undervalue what you're selling ("everything costs too much").  Frequently, this is because the prospect is not aware of the full breath of benefits they're getting.  And all too often, it's because they haven't been made aware of them.  In their eagerness to get the deal, too many sales people and business owners simply cave in by offering discounts and other incentives to close the deal.  Not only is this poor salesmanship, it's also bad for your paycheck, and for your business's bottom line.  We're going to change that today.

 

In any basic sales course you will learn the fundamental concept of selling benefits, as opposed to simply spouting features. Here, we're going to cover ways to develop the other side of the value equation prospects consider in order to pre-empt and forestall the (often unspoken) concern all of them have: while I like your solution, I'm not convinced it's worth what you're asking.  These ideas will help you strengthen your negotiating position, eliminate discounting as a knee-jerk reaction to price objections, and allow you to consistently command the full price for your offering - one that reflects the full value of the benefits you're providing.  Which in turn will increase your sales commissions or business profits.

 

The benefit/cost (or Return on Investment) analysis that prospects go through looks like this:

 

 

(Σ all potential tangible monetary savings and/or incremental revenue + a subjective quantifying of all intangible benefits)/Total Cost

 

 

That is, all the benefits they'll be getting divided by all the costs they'll be incurring.  What am I getting for what I'm paying?

 


Let's look at the components that comprise the Benefits. Monetary savings are just what the phrase implies - how much will your prospect save by investing in your product or service?  Incremental revenue - how much more will your prospect earn by investing in your product or service?  A subjective quantifying of all intangible benefits refers to the value prospects assign to "soft" benefits, such as added comfort, better security, less stress. 

 

The Total Cost to the prospect is often not as straightforward as one would think - and prospects are always wary of "hidden costs".  So be sure to be up-front and explicit about all costs - known and potential - the prospect may incur. Total cost can include such items as:

 

 

o         one time setup/implementation/registration costs

o       the price of your product or service

      a one-time purchase

      prepayment on a multiyear contract (with discount)

      a monthly license charge

o      additional charges in out years (replacement parts, upgrades, etc.)

o      cancellation fees

 

 

And just as there are intangible benefits, your prospect may also perceive there to be intangible costs associated with your offering.  Of course, you won't want to volunteer these (you probably won't know what they are anyway, since the prospect is unlikely to verbalize them), but they'll nevertheless be taken into consideration by the prospect.  So you might want to add a fudge factor for a your-eyes-only version of the calculation.

 

Now that you have all the benefit and cost elements, it's time to plug in real numbers for this particular prospect.  Here's how:

 

1.     Identify all the problems your prospect is having, and/or opportunities to make money they have before them, for which your offering is a solution.

2.    Align the relevant benefits of your offering to the prospect's problems and/or opportunities. Any unique benefits you provide that are both meaningful and important to the prospect are best.  Not only do they help you justify your price, they provide a rationale for charging and justifying a premium price.

3.     Have the prospect estimate the cost of not addressing the immediate problem, or of not taking advantage of their opportunities

4.     Determine other problems/missed opportunities that might be caused by doing nothing

5.    Have the prospect estimate the cost of not addressing those problems/missed opportunities

6.    Help your prospect discover the full value of your offering by connecting the dots between their problems and the resolution of those problems, or their opportunities and the achievement of those opportunities that using your product or service will provide.

 

 

Done correctly, your Benefits/Cost ratio will not only be impressive to your prospect, it's likely to be better than that of your competitors (who most likely won't even have bothered to produce one for the prospect).  And that answers the "Are You Worth It" question with a resounding, "Yes!"


Good Selling!



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