Nov 22, 2021 • Podcast

How do I quantify the impact of my solution?

Paul addresses the customer’s need for quantifiable proof of your solution’s viability.

Show Notes 

How does your solution impact the customer’s profitability or cash flow?

Does your solution reduce overall cost for the customer? Let the customer know.

How does your solution create new opportunities for the customer?

“Focus the customer’s attention on the most immediate and the most tangible outcome.”

Make the customer part of the data-gathering process. This adds validity to the information you provide.

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How do I quantify the impact of my solution?

(Transcribed from podcast)

On today’s episode, we’re going to tackle a question from a recent training seminar. Actually, I was with a group of salespeople, and we were talking about one of their prospects and how this particular prospect was all about data: crunching data, determining if their solution is worth it, if it’s viable; what they’re going to gain. And they needed more than just a statement or value proposition. They needed some proof, some numbers—data. So that’s the question: How do I quantify the impact of my solution? That’s what we’re going to focus on in today’s show.

Now, before we get into that, a quick note here. Selling Through Tough Times is now available. It’s on Amazon, Barnes & Noble. Wherever you get your books, you can find Selling Through Tough Times. And, you know, the reason I mention the book on this particular episode is, we have a whole section in the book, in our persuasion chapter, on how to quantify the impact. So I’m going to share a couple of ideas, a couple of thoughts based on what we cover in the book.

So, let’s get back to that question: How do I quantify the impact of my solution? Let’s think about this for a moment. We are still facing some uncertainty. Right now, ee’ve got inflation; we’ve got economic uncertainty. We’re wondering what the next year is going to look like. Obviously, the pandemic is still affecting our daily lives, so there’s still a fair amount of uncertainty out there. That means when customers are making buying decisions under the cloud of uncertainty, they need as much proof as possible to help them make the right decision. And proof comes in various forms, but offering proof of how your solution will impact their business—if it’s going to be, you know, labor savings, cost savings, if it helps improve productivity—buyers will need quantifiable proof to help them make decisions. Because again, during tough times, like we’re facing right now—tough and uncertain times—buyers need proof.

They need something, also, to help justify the decisions that they are making. Numbers help provide justification. It’s clear, it’s black and white, it’s easy for them to see and to comprehend. So that’s why quantifying your impact of your solution is so important. So, here’s a couple of questions to think about to help you quantify the impact of your solution.

Number one, ask yourself: ‘Okay. How does our solution enhance the customer’s profitability or cash flow?’ Pretty straightforward. Pretty clear-cut answer. Consider how your solution impacts their profitability or how it will improve cashflow. During uncertain times, cashflow is king. Cash is king rather. I guess I should say it that way. But people make decisions, buyers make decisions to help improve their cashflow, and profitability, obviously, is a big component of that.

When I sold in the construction industry, I sold for the Hilti organization. Hilti has very innovative products, but they tend to be a little more expensive. They charge a premium for that. We had this one fastening system that was 15 times more expensive than one of the competitive solutions—15 times more expensive, which is a big hill to climb, I don’t care how innovative the product is. But this particular product saved an enormous amount of labor. We would run an analysis to figure out how much more money they were going to make.

And the reason I mentioned this example is, we actually had a spreadsheet that we created where we could determine, okay, the number of fasteners, their labor hours, how much time they’re going to save with us, how much less rework there was going to be. We were able to quantify all of these and deliver a bottom-line profit number where we could go to the customer and say, “Yes, I know that our solution is more expensive, but you are really investing in this product so that you can gain more profit.” And we would detail and explain how and show them the numbers.

And we talked about how this didn’t reduce cost, it enhanced profitability. That was the focus of that particular sale. So again, the idea here is we have to ask ourselves: ‘How does your solution enhance the customer’s profitability or cash flow?’

Next thing we’ll talk about: How does your solution reduce overall cost? Cost—remember, cost is much bigger than price. Cost is everything that that buyer will sacrifice. And I’m thinking of one company. We did some work in the belting industry. So these are the companies that sell those rubber belts that are used in big warehouse facilities, like an Amazon facility, you know, where the packages are running across these belting deals—very technical term by the way there. But anyway, we had a salesperson in one of our training seminars, and he talked about switching out the belting at one of these facilities, logistical facilities. And the buyer said, “Look, I can’t make this switch. Your belting is more expensive. If I make this decision—if I make the decision to switch out your belting, even though it’s better and lasts longer, my management team is going to come to me and ask me, “Why did I switch to pay more for belting?”

Well, here’s what the salesperson decided to do. He gave the customer some sample products. He says, “Why don’t we do this? Let’s take one section of your warehouse. We’ll put in our new belting that will last longer. And we’re not going to charge you for this. We’re just going to calculate some numbers, right? We’re going to test it and see how it performs.”

So here’s what happened. The salesperson installed their belting. Their belting ended up lasting like twice as long as some of the other belting companies that they were competing against. And they took that data and they put together hard cost-saving numbers, and then brought it to the management team and said, “Look, we have the opportunity to reduce our overall cost by this much. All we need to do is invest in this new belting.” They made a data-driven argument on how they’re going to reduce cost. And in these numbers, by the way, that they were using, were numbers taken directly from the facility, from the testing area where they used this different belting. That’s what’s powerful about quantifying the impact is we have to make sure that we’re using their numbers.

Another question: How does your solution create new opportunities for the customer? Does your solution allow the customer to go after new markets? That was one example—I think I’ve mentioned this on previous shows, but we were doing some work with a company, CNC machining distributor. And the equipment that they were selling was certified to produce parts in a certain industry, which meant when a customer would buy their machining tool, it gave them a new opportunity to produce parts in an industry that they currently are not working in. That means they’re giving that customer a brand new opportunity. So ask yourself, ‘Okay. How does your solution create new opportunities for the customer? Does it enable them to sell more product? Can they go after new markets?’ That’s key.

So, ask yourself those three questions. Again, those three questions are:

  • How does your solution enhance the customer’s profitability or cashflow?
  • How does your solution reduce overall costs? and
  • How does your solution create new opportunities for the customer?

Now, a couple of tips here. Focus the customer’s attention on the most immediate and the most tangible outcome. That’s important to note is that, soft costs are called soft costs or soft savings for a reason. They’re hard to prove. So focus your presentation on the most tangible and immediate gains.

Now, number three here. This is a final tip. So the first tip was to ask those three questions. Number two—focus on the most immediate and tangible items. And the third and final tip—make the customer part of this process. Ask them to share labor costs with you. Create Excel spreadsheets and send it to them and say, “Hey, here’s what we have so far. What’s your feedback? What are we missing?” Make them part of the process, because, if they are part of the process in determining the impact, they are going to view the information as more reliable, more relevant—because they’ve been part of the process. So, ask them to join you. Have meetings. Meet with other stakeholders within that organization to gather this data and information. And when you present this information, make sure you remind the customer, “Hey, this data that we’re sharing with you is taken in part from your numbers. You were part of this process.” It adds some validity to whatever you are quantifying.

All right, folks. Well, that is the episode today. Again, how do I quantify the impact of my solution? Hey, make sure you pick up your copy of Selling Through Tough Times. As I mentioned, we go into much more detail in this book. There’s something like 30 or 40 additional questions that are going to help you determine the impact of your solution.

Make it a big day.

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