There are times when you feel that a project quote you have given a client is a must-win situation. You know you have built a good relationship with the client and that if they opt for your solution, it will save them a significant amount of money and you are confident that it’s just a matter of time before the project is awarded to you. But somehow without a warning, the entire deal falls through.
When you delve into the how and why of the failure, you realise that a rival offered a greater business impact with reference to various financial metrics that are relevant to the customer. This is, without a doubt, no less than a disaster for the funnel, your sales team as well as your company’s results for the quarter.
Cost saving is essentially a matter of translating functions & features into a financial form. While cost savings aren’t directly connected to the client’s desired business results, they are required for getting to their business value. Global companies that are at the fore of their respective industries are aware that the solutions, products and services they provide are the only one factor in the client’s approach to overcoming a challenge or solving problems.
How Value Should Be Measured
When it comes to measuring value, it is a lot about what your customers think of your company and the services and products you supply. Since they tend to make every decision differently each time, it also means that the business value would have to be disconnected from your company’s product-oriented cost savings.
Top sales performers know that the cost savings of their company also have an impact on other generic financial metrics. They use their expertise to understand the customer’s context as well as the context of all the stakeholders. This gives them a chance to understand which financial metrics are of primary importance for your buying team.
Aside from this, they identify what the different strategic business initiatives are, and then connect the dots that exist within their product-based cost savings, the financial metrics that have been directly impacted and the impact they have on their client’s strategic business initiatives.
Metrics That Matter
Understand your customer’s financial performance and identify financial metrics that matter to them. You can educate yourself by accessing sources and understanding metrics such as:
- Analyst views
- Financial reports
- Strategic views
- Return on assets (ROA)
- Operating costs
- Return on equity (ROE)
- EBIT and EBITDA
- Cash flow
- Net & gross profit margins
All of these are crucial if you want to create exceptional value for your customers, the next time around.
Value Mapping Chart
It’s important that you also create a value mapping chart for your buying team. This document would contain the business reasons for each buyer, the expected results; the solution to achieve those results and the manner in which they measure success.
This kind of preparation indicates that you are working in reverse, from the client’s as well as the stakeholder’s perspectives, and that you walked the extra mile to create exceptional value for them. When you adopt this approach in all your projects, you will find that you are able to bag other projects that come your way, with far more ease.
For effective and sustainable cost reduction strategies & efficiencies that will increase your bottom line, contact the experts at Benchmark Cost Solutions at this number – 02 9525 0777. If you prefer, write to us at this email address, and we will revert quickly.
Thanks for reading,
Benchmark Cost Solutions Team
02 9525 0777