To support a prospects business case story there are a few key components that should matter to you as a salesperson. They should demand your attention as each element helps to show the extent to which your proposal impacts the prospect company’s performance.
- The reasons they should change (Benefits) and Why now? (Cost of No Decision)
- The cost of change (the level of effort they need to invest to realise the benefit)
- Any risks and uncertainties.
Whatever the project there will be a reason for doing it, and this should be described in terms of quantifiable benefits.
Value must be in your customers terms, otherwise it may be difficult for them to engage fully with your proposal. This might be “because it will save us money”, “because we will win more business”, “because we will be more competitive”, because we will be more productive” or “because we will retain our best talent”. Whatever the reason for change the benefits must be relevant.
These benefits should be tangible and they are often financial. Some examples would include a saving in the company’s cost base, a better or accelerated revenue stream, improved productivity and cost avoidance (where the potential risk of not doing something may be costly). They are not always be expressed in financial terms though; other measures such as time saved or man-days effort could be used in their business case.
I remember in my early sales training, being taught “FAB” – Features, Advantages and Benefits. This is a simple way to work through the benefit for the company and it casn help you to focus in on these benefits. Let’s look at an example.
- Features, these are easy to use. Facts or characteristics about your offer. For example, “data throughput of 2MB/S”
- Advantages are what the features do. These factual statements are not usually connected to a specific prospects needs but more broad statements. In this scenario “2MB/S means faster throughput that traditional routers what can process data at 500KB/S”
- Benefits explain why someone should care about the advantage statement. The benefit relates to the specific prospect. In the example “your 300 people in home offices use large files 5 times a day. The faster throughput will reduce the costs of unproductive computer downtime of 15 minutes each time they need to use a file.”
It is important that you consider all of the costs to be included in a business case, this should represent the total cost to the prospect of implementing your solution. You should understand the broader costs that your prospect will incur when taking on your offer. If not you risk your conversation focusing on your product and price rather than on value to them.
Costs overall would include some of the following; capital expenditure (purchasing costs and cost of capital); project delivery resources for implementation and configuration; operational expenses associated with infrastructure, training, project management, exit costs and consultancy.
A clear understanding of the current situation for a prospect will help you to understand the Cost of No Decision (CoND). This is the cost associated with steady state. For instance, a prospect might be burning cash with old technology that is both inefficient and expensive to maintain, their CoND may be high as operational costs are spiralling. Another client might be losing out on the potential revenue growth by not having the right solutions in their portfolio. In situations such as this the prospect is more likely to change now where there is a high CoND as this risk of loss will create greater urgency.
All change programmes have some risk associated with them. If you think there is no risk in your project you don’t understand the impact on the prospect organisation well enough. Another way to look at this is that risk is an essential part of running any business, an business owners need to balance the risk with reward to make decisions that move there business forward.
Rather than list out more reasons look here at this article for a list of 130 project risks from which to select relevant ones for your customers.
Make sure that any assumptions you make are explained carefully. Crystal balls are notoriously inaccurate and there is inevitably some guess work involved in predicting what will happen and when. Explain as clearly as you can your understanding of the potential risks, the magnitude and likelihood of the risk and explain how you might help them mitigate them.
Two key issues relate to risk;
- How likely is it that this risk will happen, what are the chances? the more likely it is to happen the more you need to consider how you will mitigate this risk
- If the risk does happen, what would the impact be on performance? If the impact is low then this will help your case, if the impact is high then there is a chance that your proposal could be derailed.
It is important that you have a good view of the risks associated with the clients adoption of your proposal. Take a minute to consider both the likelihood and scale of impact for these risks. Armed with this you can plan to tackle these potential objections early in your sales process.
So, your business case for change is a fundamental stage in the buying process. The better you understand the value in your customer the more you will be able to have a conversation focused on business impact rather than price.