Value > Cost + Risk + Effort

“I showed the buyer why my solution was so valuable. We had clear, provable ROI. So, why didn’t they move forward?”

That’s a pretty common hangup for marketers and sellers. We think that because we’ve demonstrated value the conversion to an SQL should happen. And that SQL should just keep on marching through to close.

After all, the ROI is clear. Why wouldn’t you want net ROI? It’s like free money. Why wouldn’t you act now?

Well, it’s because we’re too stubborn to look at the buyer’s perspective. Basically, you need to cross two thresholds:

First off, is Value > Cost + Risk + Effort?

You’ve generated an ROI case in the prospect’s mind. And that ROI is greater, significantly greater, than the cost of your solution. But that’s not enough. After all, the cost of implementing the solution and the total cost of maintaining it over time is not trivial. Your prospect is thinking about a lifetime of potential costs.

Next, what about the risk? You might be focused on the risk of inaction for the prospect. However, the prospect is likely thinking about the risk of what happens if the implementation or use of the solution goes wrong. What is their internal political risk of championing change? These factors are weighing down the value you’ve shown.

Lastly, you have to consider the effort involved in using your solution. There’s not just the challenge of getting it stood up and managing it as I mentioned earlier. It’s also the effort required to change internal processes and mindsets. There’s the effort required in trying to maximize the value. There’s navigating internal approval processes. That can be exhausting, especially if the net value is marginal.

So, you add up all of these components and you can see why inertia is so often the default.

All right, so if you are able to confront the cost, risk, and effort challenges. Are you in the clear? No, because the second threshold comes into play.

Next time, I’ll talk a bit more about how the second threshold, which is the challenge of prioritization, can derail your deals.