Highest flexibility
Number of product lines
Total dollar benefits of different goals customers want to achieve addressed by various solutions from the same vendor (such as transaction costs and economies of scale)
Broadest selections
Hours of downtime
Number of downtime hours multiplied by the average hourly cost (labor, administrative, lost revenue, etc.)
Quickest response times
Percent of on-time project completion dates
The bonus or penalty incurred for each day ahead/behind schedule
Comprehensive project management
Total profit impact
Total savings or costs reduction achieved
Highest documented savings
Market share impact
Profit or revenue calculations for each point increase/decrease in market share
Most competitive products
Cost of doing nothing
Total dollar value of unrealized benefits
Existing supplier or status quo if savings aren’t measurable; the most dollar savings if they are.
Exhibit 3-4: Everyday examples of SOEs.
Note When customers use systems of evaluation beyond their technical expertise, it usually indicates that an outside consultant is helping them select one. In addition, to find out which SOEs favor your unique strengths best, ask your highest-value customers what measurable benefits they received from the goals you helped them achieve and how they calculated their SOEs.
Example
Michelle Ross sells a product costing more than that of her competitors (sound familiar?) Yet, her unique strengths produce two-year paybacks. Her lower-priced competitor’s product has a four-year payback. She knows that with customers who favor the goal of largest savings versus lowest up-front costs, she wins the sale.
Michelle must prove to customers that achieving the former goal over the latter provides more value to them—if they use the SOE of total dollars saved over a four-year period.
Note Customers without any SOEs are tough to sell value to. Subjective or emotional factors found in Column 1 and their simplest calculations, price or delivery, become their primary SOEs for calculating value.
The Cost of Doing Nothing
One of the most common systems of evaluation that customers use is the cost of doing nothing. As shown in the list in Exhibit 3-4, this SOE favors existing suppliers or status quo. The cost-of-doing-nothing SOE becomes more prevalent during economic downturns. The most effective way to overcome this SOE is to substitute one that calculates the measurable benefits from achieving suggested goals on a per diem basis. Use SOEs to help customers measure the dollar difference between what they are doing now and the goal they want to achieve. When customers realize what potential savings or revenue they are losing daily it increases their sense of urgency.
For example, your products can reduce customers’ operating expenses by $300,000 annually. Instead of focusing on this annual savings amount, point out to customers that every day they lose the opportunity to save $822. Demonstrating that time is money is a powerful way to overcome the cost of doing nothing that favors existing suppliers. You might also want to point out to customers how much products and/or services their companies must sell to generate $300,000 worth of savings—if a company has a 10 percent profit margin, they must sell $3,000,000 to equal savings of $300,000.
Making Goals Measurable
With apologies to the movie Field of Dreams, if you help customers measure their goals, they will come. Customers and you both want to know whether customers are getting the most value possible. When you build value from their goals down, not from your features up, everyone does know. To ensure repeat business, ensure that customers achieve their goals every time they do business with you. If you always start with their goals, not your products, you will reduce the chances of unfulfilled expectations. The first time they do not achieve their goals you will remember the following sales adage: “Competitors do not win over your customers; you unwillingly lose them due to unfulfilled expectations.”
Yet, if you do not make customers’ goals measurable, you risk losing them. Ironically, you usually find out how customers measure the value of their goals after you lose a sale or disappoint a customer. A statement such as, “I thought you were looking for it to do this, not that,” indicates you were measuring their goals differently than they were.
You also risk having customers who cannot tell that you provided more value than competitors—so they will not compensate you for doing so. Finally, without measurable goals, it is hard to guess how customers who purchased your products will judge the merit of them. You want your customers to look back on any purchase they made from you and be able to measure how it achieved their goals. When this occurs, your sales approach helps you build barriers to competition and have long-term relationships with both individual contacts and their organizations. Sales success is a simple formula: make your Column 2 professional bonds with organizations as strong as your Column 1 personal ones with individual contacts to create long-term customers. Measurable and documented goals that you helped an organization to achieve become your “value-tether” to it even if your contact leaves and is replaced by someone who favors competitors.
You make goals measurable by making the customer’s benefits measurable. The benefits of goals are similar to the benefits of features. Customers assign them value by the measurable value they produce. You convert their benefits into time or money also. You know this occurs if the word by appears in your benefit statement followed somewhere down the line by a dollar amount. A “by” will usually turn into a “buy.”
Example
“Reduce costs by $32,000” (measurable benefit) or “increase production capabilities by 18 percent to generate seventy thousand (measurable benefits) more widgets weekly.” You still need to know how much each widget generates in profit or sales dollars. Therefore, convert time or percentages to dollars too.
Note Goals without measurable benefits to new prospects are like hearsay to a jury; goals with measurable benefits are like evidence. Measurable benefits turned verbal references dependent on one customer knowing another into powerful documented dollar savings ones that only depend on the facts.
If you or customers leave out the measurable benefits of goals, they attract look-alike competitors. For instance, if customers are looking to improve efficiency, me-too competitors will claim that they too can improve efficiency. The only way to differentiate customers’ goals is through their measurable benefits. One way to make the goal of improving efficiency measurable is to add the phrase “by reducing $100,000 of redundant production costs” to it. Now, me-too competitors must compete against this benefit’s measurable benchmark of $100,000 worth of savings. (See Exhibit 3-5.)
Exhibit 3-5: Use SOEs to make customer’s goals measurable.
Note When you have products and services that provide measurable dollar savings, you are able to broaden the goals you can help customers achieve.
Example
Mark James sells the outsourcing of services to colleges and universities. Outsourcing is a service where a company hires and manages the labor force to perform jobs such as janitorial, engineering, housekeeping, and food services more cost effectively than the existing work force (although, they will often hire many of the existing employees). This company has a proven track record of reducing an institution’s labor costs by hundreds of thousands of dollars.
Mark calls Dr. Roberta Brown, the president of a university, and finds out that she wants to upgrade the campus computers over the next three years. Mark tells her that he can help her to achieve that goal.
How? If Mark can save the university money on its facility services, that money can go toward the upgrading of computers. By converting goals into measurable dollar benefits, Mark will be able to show Roberta how an outsourcing company helps her to upgrade computers. Think of how many new opportunities you can create when you sell measurable value.
Customers Who Equate Needs with Goals
You also deal with customers who have only specific needs and products in mind. A customer might think she is satisfying her specific needs and that buying those specific products are her goals. They are not. You know the type. “Just give me a price on what I need and I will call you if you get the job.” This person is the boss and that is that. You need a lot of willpower not to throw out a price and duck—and wish her (and you) luck.
Resist the temptation. You do not want to react to her specific product requests without either of you knowing her measurable goals. The risks of unfulfilled expectations run high. What do you do?
With diplomacy, you stick to helping the customer to define her goals. Once defined, customers do not become defensive if you ask them to review how their proposed product choices achieve those goals. Leave your product recommendations out of these discussions; it is too self-serving and you lose credibility. You want the customer—on her own—to come to the same conclusion you have: She is making the wrong purchasing decisions and her goals will prove it.
When a customer compares her specific product needs against measurable goals, she comes to one of two conclusions. She either proves herself right and proceeds as planned or she starts looking at different alternatives. If you are in market segments where customers’ goals match up to your unique strengths, they look at your alternatives. You now have a powerful force on your side; no one knowingly makes bad decisions, not even customers who prefer competitors.