Hi friends - For my US folks, happy Veteran’s Day to all who have served our country! 🙏 

Last week, we talked about how to understand, identify, and adapt your sales process to your customer’s buying journey.

With the limited time left to sell this year, we’re going to focus on another biggie this week - helping your customers quantify and understand the cost of inaction.

Various studies have reported that roughly 40-60% of B2B sales are lost to INACTION. Yep - not lost to a competitor….lost to doing nothing.

So, let’s talk about how you can mitigate your risk of losing this way.

The Cost of Inaction

Your product solves a problem, I’m sure. And in most cases, your prospect probably agrees that their life would be better if they had your product.

However, believing their life would be better alone will not close a deal.

They also need to be able to rationalize that the total true cost - hard dollar + the time required for change management - is truly worth it. That the juice is worth the squeeze, if you will.

Helping your prospect understand the cost of inaction (COI) can be a useful tool in helping them with this rationalization.

Help them quantify what we know will happen if they don’t change (COI).

It’s easier to rationalize what we know will happen than what we think might happen.

ROI = what might happen - the predicted outcome if we change

vs

COI = what we know for sure is happening if we don’t change

So, let’s look at an example…

Example: HR Data Product being sold to an HR leader at a midsize company

Prospect challenge: Lack of visibility into their employee journey data….leading to a 20% recurring voluntary attrition within their workforce, costing them $2mm/month

HR Data Product cost: $100k/year

COI = $2mm/month

If they do nothing, they know they will continue to lose 20% of their workforce each month = $2mm/month. It’s been happening; if they do nothing, it will keep happening.

If they buy your software…it’s highly probable you’ll be able to help them identify the issue AND rectify it within 3-6 months. You have evidence of helping other similar-sized employers do the same (hint: evidence through case studies or reference calls).

If we take the worst-case scenario of 6 months to identify and rectify….that’s a quantifiable savings of $2mm/month for 6 months = $12mm in savings for the next calendar year.

Again, if they do nothing….we can almost guarantee they will lose another $24mm in the next 12 months. If they do something, they may only lose $12mm.

Now, getting that info out of your prospect and presenting it requires some finesse.

Your conversation with your champion might look something like…

“I know this is a big decision for you to make, and there are significant costs to consider. I appreciate it’s not only the hard dollar cost of our software, but it’s also the cost of your time (and your team’s time) to implement and learn a new product.

Truly, I empathize with you and want to make sure you feel confident about your decision.

An exercise we run internally to help us make decisions of this scale is a ‘cost of inaction’ exercise, where we quantify what we know will happen if we don’t make a change.

There is always a cost - a cost to change and a cost not to change.

Based on what I’ve heard from you over the last several weeks (or months), I’d estimate there are several known costs of inaction for your team, namely…[quantify things you’ve heard or ask questions to get to a quantifiable COI].”

Categories of their cost of inaction may include financial losses in the form of -

• Attrition or churn

• Missed revenue opportunities

• Increased operational costs (proportionate with increased volume)

• Decreased market competitiveness

• Loss of brand reputation

• Customer dissatisfaction (leading to churn/revenue loss)

That’s it for this week! Hope this helps.

Want to learn more about how I help startups increase their revenue by 150-590%? 👀 

Know someone who could benefit from being added to this distribution? Send them here to sign up!

With love and gratitude,