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Find the real customer benefits

Find the real customer benefits

Sales situations invariably reveal the most interesting set of circumstances, some of which put you on the “back foot”. Imagine a scenario where a potential client is genuinely interested in your solution and believes it will solve their business problem. However, the client’s parent company have said they will solve the problem internally but it’s going to take 4 or 5 years to complete in-house. Does this mean that the situation is impossible to win? No, but it will need a strong business case to cover spending money in what is only a “gap” period.

Background

An independent Microsoft reseller has proposed an Enterprise Resource Planning (ERP) solution to the local office of an international clothing manufacturer. The customer currently uses an older in-house developed solution that is tailored specifically to its needs and is supported by the in-house team. The system needs upgrading and their parent company is working on a plan to install a company-wide replacement. However, it is five years until that replacement system will come on-line and the local office believes there could be valid business reasons to install a new system now-even if it is only a stop gap.

Problem

How does the sponsor go about persuading the parent company to do something now rather than wait another five years? The sponsor feels it is worth doing but, even if the benefits of the proposed solution were clear, would they be sufficient enough to convince the financial decision-makers that a stop-gap measure would make economic sense?

Solution

Areas of financial benefits such as reduced customer lead time, batch processing of orders and over-night credit card verification had been assumed. However, when using Shark it became clear that the assumptions were not right for the customer’s business.

Shark correctly identified and quantified the deliverable benefits from the proposed solution.

These were:

  • Improved stock control
  • Increased revenue from their customers
  • Purchasing savings
  • Reduced transaction cost
  • Labour saving

Using Shark, a business case for the client’s financial decision-makers was generated in front of the customer. This contained all of these sponsored areas of benefit and included the appropriate ROI calculations of Payback, NPV and IRR with full Discounted Cash Flows. This report was used to supplement the technical proposal.

Result

The economic benefits of the solution were shown to financially justify the cost of the program and reinforced the feelings of the sponsor. This was sufficient to convince the head office decision-makers that the project should be taken to the next stage. The Shark ROI tool had proved it made good business sense to invest in a solution that was previously regarded as unnecessary.

 

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