3 Ways to Quantify the Benefit of your Product and Grow Sales
Understanding and communicating the value of your product in a way that drives revenues.
How awesome is your product really? I know you have users that say they love you, you have companies that are paying you thousands, maybe even tens of thousands of dollars, but how valuable is your product? What is the actual Return on Investment? Building a product that creates 10X value is difficult. Selling a product that doesn’t create 10X value is also difficult. But as a startup, both are tough and you need to make progress. So, how do you get there? It starts with knowing what your product is worth today — does your product provide 2X value at least? And if so, how do you know? Have you actually been able to quantify this? If not, how do you do it?
Focus your product and sales efforts in helping your clients do one (or more) of the following three things: make money, save money, or manage risk. I’ve provided a couple of questions to ask yourself for each below, along with the ideal response to set as a goal, and an example of how this is being done effectively today. Note: I’ve used Twillio for all three examples because I think they do a phenomenal job of really simplifying their value proposition and elegantly quantifying the benefit of their solutions.
1. Make Your Client Money
This is the situation whereby in purchasing your product, your client is somehow able to grow their business faster. Perhaps it’s a service that generates more leads to grow a sales pipeline, or a product that helps optimize your website to drive more conversions. Whatever the problem is that you’re solving, the ROI on it is simple math: The ratio of money spent by your client versus money made by your client.
Ideal question to ask yourself:
How does my product help my clients make money and how long does it take them to reap this benefit?
Ideal client response to work towards:
By implementing product ABC, I was able to do DEF resulting in %X revenue growth (or $Y in sales) in Z period of time.
Example:
2. Save Your Client Money
This is the situation whereby in purchasing your product, your client is somehow able to do more with less. Perhaps you’re taking a technical problem requiring lots of custom coding and your automating it; or you’ve found some unique time consuming workflow with lots of spreadsheet work and 25 different steps and you’ve simplified it into a 3 steps process. Typically, anything that helps your clients save time falls into this bucket. The question comes down to how much time, and what’s that time worth.
Ideal questions to ask yourself:
What is my client spending on this problem today and what will she be spending after buying my product?How long will it take for her to get these savings and can I guarantee this?
Ideal client response to work towards:
By implementing product ABC, I was able to do DEF, resulting in X dollars saved (or Y% savings), over Z period of time.
Example:
3. Manage Risk
This is the situation whereby your product does something to reduce the probability of some sort of catastrophe impacting the longevity of the business. It’s often but not solely, associated with security measures (e.g. malware protection in IT), industry best practices and certifications (e.g. ISO Certification for Manufacturing Quality Control), and government policies (e.g. HIPPA for privacy in US Healthcare). As a rule of thumb, if you’re helping your clients with something in the realm of corporate governance or compliance, you’re in the managing risk business.
Ideal questions to ask yourself:
What is the worst case scenario for your client? How likely is this scenario to occur? How does the cost of your product outweigh this perceived risk?
Ideal client response to work towards:
By implementing product ABC, I was able to do DEF that I wasn’t able to do before, resulting in XYZ critical outcome towards the longevity and sustainability of the business.
I recognize that this is slightly generic, but since the benefit of managing risk is typically around avoiding the worst case scenario, it is often industry specific. In this case, “XYZ” could be certification achieved, audit passed, # of customers protected or catastrophe avoided.
Example:
Conclusion
Growing sales requires being able to effectively convey your awesome value proposition.→ Having an awesome value proposition requires a maniacal focus on Product/Market fit (heck, even afterwards for that matter). → Getting to product/market fit starts with creating some real value for real paying customers. → Knowing that you’re creating value, requires getting your clients to quantify the benefit of your product in clear and simple terminology. → If you’re not at 10x value yet, don’t worry so much as to just be aware of it, because being aware means you can do something about it. → So, focus your efforts on helping your clients make money, save money, or manage risk.
If you think you’re doing some of this already, go find out how. Be specific, ask your clients how your product benefits them and keep digging until you get a clear quantifiable answer. They may not be ready to have you publicly share this with the world, but knowing the value of your product internally is just as important. If you don’t get an answer you like, then work towards finding out what it will actually take to get you there.
The best sales stories aren’t the ones where you get to ring the bell for closing a $1M deal. It’s when you can clearly quantify the benefit of creating $1M of value for your clients…
…if you didn’t catch on, that means you’ve probably closed a $10M deal (assuming you’re creating 10x value) and now hopefully you can use that story to go and help land 10 more similar clients!
Rajen Sanghvi writes at salestraction.io, where he shares his experiences in building modern sales teams and scaling startups. He strives to be the best at his craft and is passionate about motivating the people around him to do the same.
This article was originally published on SalesTraction.io.
