Don’t Underestimate the Power of a 1% Improvement
Buyers really only care about one thing when it comes to the product you’re selling: your solution’s business outcomes.
No matter how great your features are, buyers mostly want to know how your solution will improve the performance of their business. Since business performance relies heavily on financial performance, it’s up to you to clearly demonstrate your solution’s financial impact, and you should have that conversation as soon as possible.
The problem is, early in the sales cycle, you don’t know if you can even help them. Without more information and validation from the client, you can’t say, for example, you’ll improve profits by 1 percent or 10 percent by improving revenue or lowering expenses. This is where the power of just a 1 percent improvement can help you close the deal.
What is the Power of One?
The Power of One is the financial benefit from a 1 percent improvement. This improvement can be in Areas of Financial Performance or Operational KPIs that are relevant to business units improved by your solutions.
For example, say you are talking to Marketing, which focuses on the area of financial performance revenue growth, and Operational KPIs such as customer churn. In this example, let’s suppose the Power of One is $10 million for revenue growth and $2 million for customer retention. Those numbers are great conversation starters and can be quite effective at capturing your buyer’s attention.
The Power of One does more than get your solution noticed. It also provides insights into the greatest areas of leverage for improving performance, which is very useful during account planning. It provides a financial focus to your conversation with buyers and offers a way to uncover a buyer’s expected business outcomes. Lastly, the Power of One helps you communicate with buyers in their language, separates you from competitors, and builds credibility, all of which goes a long way toward gaining your customer’s confidence.
Using the Power of One Strategically
When you’re ready to use the Power of One, it helps to know how and during which stage of the sales process to apply it. We recommend using it during account planning to identify those KPIs that deliver the greatest benefits. You can also use it in the early stages of the sales process.
A word of caution: Do not position the Power of One as a promise. It’s not a proposal or a business case. It is only a conversation starter. Nothing turns a buyer off faster than saying something like, “We can help you and are confident that we could help reduce your SG&A cost by at least 1 percent, which for your company would be at least $60 million.” Again, it’s simply a conversation starter that sets the cycle on a different tone.
By looking through the Power of One lens before you talk to the customer, you can identify what the buyer is most likely focused on. This can then help you find new areas to explore with the customer.
Having the Conversation
How do you effectively fit the Power of One into your sales conversations?
Before you get to this point, you need to confirm the company’s goals. You might say, for example, “My understanding is you’re trying to improve profitability.”
If you’ve done your homework, they’ll often answer yes, but sometimes priorities change. You want to make sure your proposed target is still a goal. Once you know the goal, you need to figure out which buyers align with that goal, as well as their associated strategies and Operational KPIs.
After you’re clear on those details, share your observations about how other companies have improved in the relevant areas. Ideally, tell the buyer something they don’t know. Then talk about how your solutions have helped others in the industry with similar goals, strategies, and initiatives.
Once you’ve laid this groundwork, you’ll share the Power of One as a conversation starter with the aim of discovering the client’s detailed goals.
The Power of One for Areas of Financial Performance is easily tailored to an individual customer since it’s based on their reported financial statements. The Power of One for Operational KPIs are typically based on industry averages but scaled to the size of the customer.
The Power of One Aligns You with Your Customer
Whatever the details of your solution and industry, the Power of One makes it easier to align with your customer. It helps you identify what’s important to them, find the intersection between that focus and what your solution can do, and quantify the potential impact as a 1 percent improvement.
Remember, buyers care about one thing regarding your product above all else: how your solution can help them achieve their desired outcomes.
Despite all the information available on public companies, your knowledge of their financials is still not complete, especially during your initial conversations with buyers. However, you need to communicate the potential financial impact of your solution, and the Power of One allows you to do just that.