Metrics RISK
Metrics are the numbers that support the needs/pain and business consequences and bring to life the potential return on investment your solution can bring.
Metrics are the third dimension of needs/pain and business consequences that allows quantitative examination of the consequences of the need/pain. This quantification can provide a justification for making a change to occur as at the end of the day it effectively gives the business case legs for implementing your solution.
Metrics can come in several forms:
• The most basic of which is for your solution to help the company increase its revenue or decrease its costs.
• Your solution may address a problem that doesn’t directly influence either of those but in one manner or form this is likely to be the connection prospect is making.
• Other likely metrics that the prospect will focus on will be things like
o improved efficiency;
o improved effectiveness;
o reduced headcount;
o headcount increase avoidance;
o greater productivity;
o increase sales
o reduce direct costs.
o Environmental contribution
o increase speed to market
o improved competitive advantage.
o The list goes on….
o You need to understand which metrics are relevant in your business that you can backup and prove.
Without metrics your argument is weak. It may appeal at one level because you can point to business consequences, but adding numbers to this strengthens the argument immensely.
Amplifying Factors Priority, Business Consequences, Pain/Need
RED – Metrics are Unknown You need to uncover some basic metrics or suggest approximate values to your prospect to help them with the business case for your solution. Business cases without numbers are difficult for companies to justify going forward with. |
AMBER – Metrics Indicated Hopefully, you can provide a potential example of the metrics that would underpin your solution and consequently, help drive the deal forward. |
GREEN – Metrics Confirmed This will put you in a good place to build a return on investment model for the prospect to enable that prospect to understand the true impact of your solution. |
Mitigations – What to Do?
Metrics provide input for return on investment (ROI) and time to value (TTV) calculations by your prospect. You need to model some of these in advance of discussions with prospects, which will strengthen firstly your ability to ask for the right metrics and secondly, to give you the confidence to present these as part of your solution when you come to demo your product.
Don’t be surprised if the client can’t give you direct metrics. Sometimes your offering them a solution to a problem they know they have, but they haven’t really thought about quantifying what the problem actually means. For example, you may be offering a solution to some things are currently doing and they don’t realize the way in which are doing is highly inefficient. “This is how they’ve always done it” so they never take the time to work out how much it’s costing them.
Don’t forget to amplify the cost in terms of the opportunity cost as well. For example, your solution might save salespeople time. What could they do with that extra time? It could be that they can use that extra time to increase revenue so you not only save them time you also give them valuable time that they can use to their benefit.
As a rule of thumb, prospects look for a 10 X return on investment for an innovative solution. So if you can show them how they can 10 X the return you are in a strong place. So if your solution costs $5000 per year, the metrics need to show you that they can save $50,000. Anything less than that is unlikely to be perceived as credible in terms of being worth the cost in time risk et cetera changing your solution. So put some good thought into this element of the sale.
Don’t obsess over the metrics and don’t try and force situations where numbers just aren’t possible. Sometimes you have to go with consequences to really drive the business because it’s not possible for the prospect to come up with numbers that you can work with.
Over time, go back to existing customers and try to get some good quantification in some metrics from them. This is a very powerful in your presentations and helps enormously to justify the purchase.