Selling the opportunity cost

In software, generally you’re selling efficiency. Sometimes people don’t see the value or believe that the efficiency gain is worth it.

One way to flip this is to not always focus on the gain itself, but what can be done with it. For example, if someone is saving 15 minutes a day per employee, the potential customer might do the math and take 0.25 hours/day * 250 working days/year * 100 employees * $20/hour average wage. Ending up with math that says they will save $125,000 per year. If your software costs $150,000 you’re hosed. Or so you might think.

There are only 2 likely ways the deal would happen in that scenario:

  1. Nepotism. You’re a family member of a board member or decision maker and they want to line your pockets. This is not a good way to do business.
  2. You add in the opportunity cost of that time as well.

Thinking about #2, that time saved is going to be replaced with something else. If that something else is valuable, then you’re back in business.

Here are some things that are common and highly valuable usage of time to use towards calculating the value of an opportunity cost:

  • Working on marketing materials
  • Negotiating with vendors for better pricing/terms/delivery
  • Connecting with new customers/keeping existing customers happy
  • Networking/Partnership Development
  • New Product Concepting
  • Coordinating internally between groups to improve results

Everyday we wake up and go to work, we’re choosing to do that over everything else we can do because it’s the highest value to achieve our goals (retirement, feeding our families, paying for a child’s college, etc.) Tasks at work are no different, but at times when we take away something to software, we need to have something more valuable to fill it. Figuring out what that is makes a good salesperson.