Changing The Customer Conversation To Total Cost

For salespeople to convince the cynics, they need to get past price. Getting past price means changing the conversation to total cost.

“A cynic is a man who knows the price of everything, and the value of nothing.” - Oscar Wilde, Irish Playwright

Some could argue that we live in a cynical business world; a world where the customer is concerned about acquisition price versus total value. For salespeople to convince the cynics, they need to get past price. Getting past price means changing the conversation to total cost.

Convincing the customer to think in terms of total cost is challenging for several reasons. Humans are hardwired for instant gratification. Customers only understand total cost when they look past the immediate and obvious variables. That’s why a cheap price is so tempting. It’s tangible, it’s obvious, and it’s immediate.

The second challenge is presenting proof versus an educated guess. The price on a proposal is solid proof. A price is exact and tangible. Total cost is an educated guess. This educated guess is less convincing and harder to prove. Most customers would agree that total cost of ownership is higher than acquisition price, but they can’t tell you exactly what that cost is. In the customer’s mind, that incalculable cost doesn’t exist. If that cost does not exist, how could a salesperson reduce it?

The third challenge is short-term versus long-term. Organizations are run by instant-gratification-seeking individuals. That means organizations are more short-term than long-term. The management guru, Gary Hamel, mentioned that most strategies focus on short-term challenges versus long-term opportunities. Short-term organizations rely on short-term criteria to make decision.

The final challenge is familiar costs versus unfamiliar costs. An individual purchasing a product is keenly aware of the purchase price, but do they understand the cradle-to-grave cost? Without input from other team members, the individual makes a decision based on their perception of total cost, not the actual total cost.

Salespeople can overcome these challenges by changing the conversation. Here are a few suggestions to help you change the conversation.

Total Benefit of Ownership

To make a total cost conversation more compelling, discuss the total benefit. In Walter Mischel’s classic marshmallow experiment, children were offered one marshmallow now or two marshmallows in fifteen minutes. Most choose the single marshmallow, but some were able to delay gratification. For the customer to resist the single marshmallow (price), focus on the sweetness of the total benefit. By discussing total benefit, you’re projecting the customer into the future, past the immediate gain of a cheap price.

Use Proof

The total cost has to be tangible for the customer. To make it tangible, provide proof to support the conversation. Any educated claim should be supported with proof. Several organizations will use spreadsheets and total cost calculators. Other organizations use case studies highlighting the total cost and total benefit of their solution. In either case, the numbers have to make sense and be realistic. Customers want the truth. Customers value proof.

Educate the Customer

Salespeople should educate the customer on unfamiliar costs and the cost impact. The salesperson can educate and make claims, but proof is more compelling. To prove a claim, involve other people impacted by this purchasing decision. Ask them to help you determine total cost. When a salesperson expresses their opinion, it’s a claim. When a fellow team member expresses their opinion, it’s proof.

For salespeople to get beyond price, they have to change the conversation. At your next customer meeting, have the customer walk you through the cradle-to-grave experience of the purchase. When the customer mentions a cost variable, probe further. Ask the customer to elaborate. The more the customer elaborates, the more real the cost becomes.

Remember to substantiate any claim with proof. Provide customer case studies and develop total cost calculators. Ask the customer to collaborate and help you determine their total cost. Make them part of the process. When the customer participates, they provide themselves with proof. The customer values proof more than an opinion.

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