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| Bob Schultek Author of The Gauntlet |
Whether you provide a product or a service, its value to your customers depends on their goals. Your success in earning their business depends on your ability to discover what your customer values and why.
If the customer’s business is mature, then proposing solutions that reduce cost typically capture attention. Cost reduction targets are easily identified and validated; they directly impact net profit. And, unfortunately, they make it easier for your customer to compare you to others. Cost reduction solutions focus on the short term, on some current pain related to the customer’s core business. Proposals that reduce cost usually offer negligible sustained strategic value for the customer. Next time, you’ll again be expected to propose another reduction in their expenses rather than offering an investment in their future, increasing your vulnerability to competitors.
On the other hand, solutions that support an increase in the customer’s sales or productivity produce enduring strategic value. These solutions can be positioned as investments supporting the customer’s growth goals and future. The quantifiable benefits produced by a growth-based solution are more sustainable and cumulative over time. When your solution also strengthens your customer’s distinctiveness, then your commitment to their success is realized, increasing your exposure to their senior executives, reducing your competitive vulnerability and reinforcing their perception of you as a partner in that success.
If you must lead with a cost reduction proposal, then position your solution as a needed step towards supporting a longer term growth goal. Customers do not care about your product or service – they care only about the value you can produce for them. The more strategic the generated value, the more enduring will be your relationship.
