Problems cost money. More often than not, however, the only cost that customers and sales people focus on is that of the proposed solution. The most critical cost, the cost of the problem, remains the best-kept secret in the selling world—and certainly the most overlooked.

We define a problem as a less-than-positive or an undesirable situation being experienced by your customer. The cost of the problem is the financial impact that situation has on your customer's business due to the absence of the value your solution could bring to them.

The cost of the problem is the financial impact of staying the same, and the cost of the solution is part of the pain of changing. When customers do not have a clear picture of these two cost groups, the timing and quality of their decision will be relegated to guesswork.

When working with sales professionals, the two frequently asked questions are "How can I speed up the sales cycle?" and "How can I protect my pricing from last-minute negotiating pressures?"

It's quite amazing for us (and our clients) to see what happens to timetables and priorities once the customer truly understands the cost of their problem. It's their perception of value that starts to change their thinking. Here's an example of how it works.

One of our clients provides management software to hospitals. It proposed a $700,000 solution to a hospital in August. The hospital had placed the $700,000 into next year's budget and planned to purchase the system during the first quarter of the next year. This was all accomplished without determining the cost of the problem that the hospital was experiencing and which this software would resolve. The decision to purchase the system was driven by the desire to keep up with the latest technology, which we refer to as a "nice to have" motivator. We soon found out the decision to purchase was delayed from first quarter to second quarter and then to the following year. It seems the funds were prioritized for another hospital project.

When our client found out about the second delay, it requested a meeting with the CFO of the hospital. The purpose: to determine whether the CFO knew the cost implications of delaying the system until the following year. (Our client had just begun to work with the cost-of-the-problem concept and had not yet introduced it to this customer.)

The question asked was this: "We understand there are financial considerations that have led to a decision to delay the new software system into next year. We will certainly be pleased to work with you when you decide the timing is right. We are wondering if you are comfortable with the financial impact the delay will have on your reimbursement revenues?"

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image of Jeff Thull

Jeff Thull is president and CEO of Prime Resource Group ( and the author of Exceptional Selling: How the Best Connect and Win in High Stakes Sales (September 2006), The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale (Dearborn Trade Publishing, 2005) and Mastering the Complex Sale (2003).