Neutralizing Savings And Cost Objections: Breaking Numbers Down To The Lowest Level

Sometimes when you are selling and you see significant savings from using your product or service, then the prospect or client may actually question the number that you have come up with. I have had this happen numerous times and one way that I have found how to combat the skeptics is to break the larger number down into a smaller number and make it relative.

For example, I often sell into the oil and gas industry in Canada. If I were to go in and tell a company that they would save $100 million dollars a year by using my service or product, they may look at me and say, "Yeah, right." If I were to come in and say, "I can help reduce your operating costs by $0.50 per barrel of oil, then I would probably get a better response.

In this case, I took the smallest unit of measurement that oil and gas companies work, a barrel of oil, and figured our how many they produce in a year and then divided the savings by that number. In this case, the company would produce 200,000,000 barrels of oil a year, which I would then divide into the savings to give me 50 cents per barrel of oil.

So in this case, the client can see the costs as it relates on a per unit basis. As such, the number is more tangible and you are less likely to startle your client.

This also works on the cost side too. If you come in with a number that seems high, then you can translate it into a per unit cost. Let's use the same example above and say that the service to give you $100M in savings costs $10M. As such, all you do is take the cost and divide it by the amount of units, or $10M divided by 200M barrels of oil, which is, $0.05 per barrel of oil.

So if I were talking to the client, I would say that if they were willing to spend $0.05 per barrel of oil, they would be able to achieve $0.50 per barrel of oil cost savings. You might also use the small investment number, $0.05 per barrel of oil, and tell them that it will provide $100M in savings.

So how do you do this for your industry? Typically, figure out what the industry you sell to uses as a unit of measure or for units of measure. Then take your costs and/or savings and apply them to the unit. If you don't know what units of measure your industry uses, do some digging on line or just ask your contacts, contacts are typically good about educating people about their industry.

By looking at the lowest number and tying it into your solution offering, your client can be better informed as to what the true cost or savings might be on a unit basis. Try this method and see how it works, you may have to adjust it, but eventually you will find something that resonates with your prospects and clients.