There are two factors concerning time that determine the purchase of any product or service in a competitive marketplace. The first is called “time to market.” If you can get your product or service to the market faster than your competitor, or if you can offer a benefit that people want and are willing to pay for more quickly than someone else, you can leapfrog your com- petition and get the sale. Everybody prefers sooner to later, and the companies and individuals who do things quickly and produce products and services faster are always more respected and better rewarded than those who are slower.
The second factor that determines virtually all business purchases, and many other purchases as well, is called “time to payback.”
Time to payback refers to the amount of time that a customer anticipates waiting before she gets a sufficient return on her investment in the product or service to justify having bought it in the first place.
In business, this is often called the “internal rate of return” (IRR).
The internal rate of return is the percentage of return that a customer receives as the result of using the product or service that you are selling.
For example, when Xerox released the first two-sided coping machines, their marketing specialists developed a sales presentation that enabled their salespeople to sell the machines in large quantities. They sat down with a prospective customer, usually a decision-maker in the printing and mailing department of a large company, and conducted an economic analysis of their photocopying and mailing costs. They demonstrated to the prospective customer that, by copying on both sides of the sheet of paper, they could cut their mailing costs in half. The savings on mailing costs for a large company turned out to be greater than the entire cost of the photocopier. In fact, as soon as the company began using the two-sided copier, they began to make a profit or a return on investment in excess of the total cost of the copier, paper, toner, and maintenance. This made the decision easy.
The Question You Must Answer
Every customer wants to know, “What’s in it for me?” in terms of economic advantage and bottom-line benefit.
Every purchaser wants to know how fast he gets the return that you promise. Every purchaser wants to know how certain it is that he will receive that return. Your job as a professional salesperson is to demonstrate to a prospective purchaser that he will get a return that is greater, faster, easier, and more certain from your product or service than he would receive from someone else’s product or service or from doing nothing at all.
In a sense, your job is to demonstrate that you sell “free” products to qualified business customers. Your job is to show that the purchaser more than pays for your product or service with the profit or savings that she realizes from using it. If a company pays 10 percent to borrow money from the bank and you can demonstrate that your product or service will pay for itself in five years, the equivalent of a 20 percent internal rate of return, then what you are selling is actually a profit maker for the customer. Your product turns out to be “free” over time. In this case, the only question that the customer will have is, “How certain can I be that your promises and projections will be achieved?” If you can’t ensure that your projections will be achieved, they risk losing resources for nothing. The key is to convince the customers that they can achieve their main objective—to make a profit—by using your product. You need to convince them that they can conserve their resources by using your product.