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!
