5 Ways To Help Prospects Determine The Break-Even Point

5 Ways To Help Prospects Determine The Break-Even Point

Most successful business owners are pretty sharp. When you offer them an idea or service that will save them money, they will immediately consider a couple decisions:

First, the business owner may decide if you’re “speaking the truth”. This is easy.  If you can demonstrate cost savings and/or revenue growth, it will make sense for them to purchase your product and/or service.

Second, they may come up with their own ROI calculation for sales to answer this age-old question:

“How long will it take to actually make money back from what you are selling”?

To be most effective in sales, you must control your prospects’ price vs. cost analysis.  If you don’t communicate the key calculation points, they may miss several key factors when arriving at their final decision — for better and for worse.

Here are 5 ways to help your prospects determine the break-even point when evaluating your product or service.

  1. Talk in profit terms:  When a company is making money and thriving, they may not be thinking about what’s left behind.  It’s important to emphasize that in today’s competitive market, every dollar has a net present value and counts. They may not be losing money but they aren’t making as much money as they could be.  The sooner a company operates at its highest profit zone, the faster they reach the break-even point.
  2. Share your knowledge:  When you figure out the cost savings (or profit increases) your service provides, share that with your prospect.  Your simple formula may be exactly the path they need to understand the right break-even point.

It starts here:

Businessman working on accounting
Businessman working on accounting.

For example:  Your prospect’s process has hard and soft costs of $5000 per month. Your product or service will decrease this by $200 per month to $4800. Your product costs $1200. Therefore, the net savings of $200 per month will reach the break-even point in 6 months.

An important note:  Prospects may not want to wait over a year to assume their return on investment. The break-even point is not only a financial decision, but comes with an emotional reaction.

  1. Emphasize the “time is money” principle:  It’s important to stress that your product is an investment with superb returns.  If the prospect waits 3 months to purchase your product, they are missing out on 90 days worth of investment return.
  2. Highlight the soft cost of poor quality: If your product or service ultimately improves the quality of your prospects’ product, there’s no better time to mention industry figures on poor quality costs.  Most facts include words such as “billions of wasted dollars per year”.
  3. Include “intangible benefits”:  Don’t forget that words such as “less overtime, smaller workspaces, less rework, and lower burden costs” result in better moral, larger profits, and the ability to expand.

The break-even point is one of the most important factors customers consider when making a purchase decision.

If you’re prepared to demonstrate all the benefits of your product, chances are your success will soar.