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Sales Tips: Cost vs. Benefit To Do's and NOT To Do

Posted by Jill Perez on Oct 16, 2017 2:52:31 PM

Sales Tips: What To Do and NOT To Do with Costs vs. Benefits

By John Holland, Chief Content Officer, CustomerCentric Selling®

Avoid Using the Term "ROI"A common term I recommend sellers should avoid using is ROI (return on investment). My reasoning is that the majority of salespeople are unable to do the necessary: present valuing of outlays and present them to buying committees. If a seller has an MBA in Finance I’m willing to make exceptions.

That said, I believe creating a simple cost vs. benefit is a step that can give sellers better control over decisions. This amounts to estimating the costs of implementing offerings and seeing if the potential benefit will justify making the buying decision.

Within CCS® we are strong proponents of asking rather than telling. In my mind asking facilitates buying while telling amounts to trying to sell or convince buyers. 

Human nature is such that people want to be in control when making buying decisions.

What NOT To Do
The most common mistake I’ve seen in doing costs vs. benefits is that sellers are trying to get buyers to agree with their estimates of potential savings. In doing so it is likely that buyers will want to discount the savings based upon past experience with sellers that have been over-optimistic in hyping “how good it’s going to be.”

Cost vs. BenefitWhat TO Do
My suggestion is that sellers:

  1. Gain access to as many stakeholders as possible, and
  2. Identify as many goals (desired business outcomes) they can.

Whenever possible, buyers should provide a base line that tells where they are today.

For example: A CRO wants to improve win rates, so the seller would want to determine what percentage of proposals result in orders. Let’s assume that figure is 18%. The seller should then ask with the capabilities provided what improvement in win rate the buyer feels would be possible. In some cases citing results that customers have achieved can be helpful in allowing the buyer to estimate what win rates could be. Once that figure is established and an average transaction size is provided, there can be a simple calculation of what the top line benefit can be. The same concept can be applied to other areas of potential benefit with the CRO.

👉 The key is that the numbers used should come from the various Key Players that are involved in making the buying decision. This gives them ownership of the results.

Once the total potential savings are established, there are several benefits to sellers if the numbers are compelling: 

  • Buyers have a reason to accelerate buying decisions to start reaping benefits.
  • A cost vs. benefit can differentiate sellers from their competitors.
  • It will be easier for buyers to secure funding.
  • Sellers can minimize concessions by negotiating based upon value.
  • Improvement in base lines can be monitored on a quarterly basis after implementation to create Success Stories.

The cost vs. benefit is a sanity check for buyers and sellers. As stated above the estimated improvement should be the opinions of the Key Players involved.

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