1. Identify solution options
Too often, a seller makes vague promises and tries to convince his customer without proof of the results offered by his product. Does it sound familiar?
Minor worries do not rise to the top of the decision-maker’s priority list. Therefore, your job is to solve your customers ’burning problems and deliver significant returns or savings. Or prevent big losses from happening.
Service productization During this time, you have identified the problems that are waiting for a quick solution for the buyer, the solution value of which you calculate and present using dollarization. The result is a benefit statement supplemented by customer figures that summarizes the results of your outrageous promise and shows the true value of your service.
Dollarization is made easier when you recognize what is changing between a traditional and a new service model. Therefore, it is your job to list the solution options you package that you offer to your customer. If you lack a clear proposal or approach, it is difficult to concretize the benefits of your service in sales.
Your solution options tell us what kind of change you are proposing. Good blanks for your dollarization include measurable improvements, such as reduced process lead times, saved human resources, or increased customer production value.
What is a burning problem?
The customer has two types of problems. Part of it is nice-to-have problems, that is, problems that would be nice to solve, but not particularly urgent. More interesting topics than a dollarizer are burning problems , for which the customer wants to find a solution quickly and sometimes at any cost.
Is the monetary benefit required to be calculated?
In the sale of B-to-b services, the monetary benefits will inevitably come to an end. That’s why it’s a good idea to address them right at the beginning and tell them what your service is producing for your customer. After that, you can focus on the qualitative benefits in peace. In consumer services, dollarization is not always needed when a customer buys pleasure, for example.
Isn't it enough to provide a high quality service?
If a b-to-b buyer doesn’t understand the true value of your solution to their business, it will be difficult for them to make a purchase decision. It is difficult to find a service provider who would not praise the quality of their own solution. That’s why talking about quality alone doesn’t set you apart from your competitors in any way. You need concrete and measurable benefits.
What if there is no financial benefit?
Dollarization finds out the savings or income of your service or product in your customer’s environment. It is unlikely that your service will be suitable for all potential customer candidates and in every situation imaginable. Therefore, it’s also possible that the results of your calculations will be negative.
So it’s not about doing eye-catching tricks and reaping the benefits of not having one. Thus, dollarization also reveals if the solution does not add value to the customer being calculated. Sure, the customer may still be willing to pay for your service, but even then, you’ve calibrated the buyer’s expectations to the right level.
What if the benefit cannot be measured?
Everything can be measured if you want. Ready-made metrics may not be available, but that doesn’t mean the meter couldn’t be created. Of course, if you firmly believe that showing monetary value is not essential, dollarization is not your tool.
2.Indicate the cost of the problems
The value may not always be where your customer expects it to be. There are also a lot of costs that haven’t even hit the customer’s mind. The traditional operating model may hide in its ovaries the surprising inefficiency your dollarization reveals.
The value is easy to determine if the necessary understanding and calculations are already in place. Often the situation is much worse and even when calculations are found, they have elephant-going openings.
Dollarization examines costs and benefits from the customer’s perspective. The calculation will help your experts understand your client’s business. In dollarization, you typically go through the basic process steps to understand where time is going or where the materials are going.
At the same time, you will find out where the benefits and value of the solution offered lie. For example, the cost of a problem may be too high a price, a lost return, or a risk to your business.
Once you’ve identified the costs of key issues, make sure your customers understand the situation in the same way. Once the customer has identified their problem, understands its scale and wants a solution, you are on the right path.
What if the customer doesn't know where the value lies?
It doesn’t hurt, because dollarization is a tool for just these situations. The whole process of a large process is often difficult to conceive without a clear analysis and a supporting tool. ” Where is the biggest benefit ” is a question that can be difficult for a customer to answer if you don’t help them go through the whole and the opportunities systematically.
Isn’t the customer themselves the best at calculating the cost of their process?
The sole purpose of dollarization is not to figure out the current costs, but also to bring a more efficient solution alongside it. The customer can certainly calculate his costs, but he often lacks information outside his own operating environment on how the operating model could be improved.
As a salesperson, you know the strengths of your service and are able to show your customer what new ways he or she could take advantage of. You may have access to comparative information you have collected from other similar projects that is not available to your client.So you can easily bring new perspectives and ideas to the conversation.
What if the cost of the problem is not found?
Dollarization may indicate that the cost of the chosen problem is not significant. Then the right question is whether it is worth investing in a solution. A good dollarization will tell you even if the problem is smaller than expected. Sure, your client may still want to solve the problem, but the calculation after his or her expectations for the results are on the right acre.
Does the calculation have to be mathematically accurate?
No. Especially when you make your first dollarizations, you’ll find that there isn’t an exact answer or even a rough calculation model for all things. Then your job is to format the measurement or value calculation so that the result represents the best possible understanding. A good way in these situations is to make sure the customer accepts the value and understands the uncertainty associated with it. As the number of measurements later increases, so does the uncertainty.
3.
Anchor value and expectations
How does the buyer know if the price you give for the product is correct, reasonable or otherwise reasonable?
Your customer will not buy anything until they have compared the price of your product to something. Your product will feel cheap or expensive for the buyer depending on what they happen to equate your product with.
Psychologists call phenomena anchoring. If your customer compares your service to your cheap competitor, they will naturally find your product expensive. If, on the other hand, the buyer chooses a multiple return over the price, he or she may find the same service very cheap.
If you don’t provide your client with a benchmark, they’ll choose it for you. Therefore, it is completely pointless to say that your product has no competitor. If nothing else, the customer compares the price of your service to the price of their own work or to not buy at all. Even a free service has an operating cost, ie the time the customer spends on the service. Therefore, even a free service can be expensive for the buyer.
In the previous step of your dollarization, you identified the customer’s current costs and the return on resolving the issue. The latter is your price anchor, i.e. the customer’s benchmark against which the customer looks at the price of your service. If your price is less than half the benefit to the customer, you are on the right ball field.
What if I price my product too expensive?
The customer decides how much they are willing to pay for your product. If a customer finds your product too expensive, you have not been able to justify the results in line with the price. Then your options are to lower the price (bad) or increase the benefit to the customer (good)
Do I have to lower the price if there is no trade?
Don’t start fixing the situation by lowering the price. Rather, think about how much your service will benefit your customer in euros. If you can’t calculate it yourself, then hardly any customer can. When there is no financial benefit, the purchase decision is difficult and the risk remains with the customer. So first, make sure your refund calculation is in order.
What if the market sets the price for me?
The market price is usually referred to in the case of a comparable raw material such as oil or gold. Oil can also be used to refine other products and to forge expensive jewelry from gold, creating more value. When your product is unique and incomparable, you get a better price than a bulk product. Then there is no market price, but the right price is what your customer will gladly shell out for the product.
4.
Package decision options
The buyer can only compare three or four options in mind. Therefore, it is your job to package the options so that the customer understands them at a glance.
For example, when buying a car, the customer often chooses an equipment package. Packaging simplifies the buyer’s decision-making and also facilitates the work of the car manufacturer as well as the seller.
Grouping sums up a number of features into a few selections and prevents the selection paralysis caused by too many options. The customer also benefits from package pricing, where the sum of the parts is less than the features purchased individually.
Dollarization helps the customer compare the benefits they receive from different or sized packages. The highest priced package can be most beneficial to the buyer if it provides significantly greater benefits than a light package. This way, the horizontal cup no longer has just the price, but you offer the benefit of a benchmark.
What is the right number of packages?
When designing packages, set the extremes first. They are the lightest possible service and the worst possible return promise you dare to make. There is a good fit in one or two packages that offer something in between. A large proportion of customers instinctively choose the middle option: it is neither too poor nor too heavy, that is, just right.
Keep the number of options at three or four. The more packages you have, the more difficult it will be for your customer to choose. This is a psychological fact: if there are more than four things to compare, the customer must first shorten the list to make an easy decision.
What if I want to customize, though?
Packaging is a suggestion to the customer. It provides default or recommended delivery content. However, that doesn’t stop you from customizing parts of the service at the bidding stage. The purpose of packaging is to provide the customer with a clear and most beneficial starting point for decision-making.
What is the right basis for packaging?
The starting point for packaging is, for example, the customer’s size, technical readiness or enthusiasm for using new technology. Size-based packaging divides your offer so that small and large companies can acquire it to the extent they need it. Packages can also be built according to the customer’s readiness, so that a lightweight package offers easy start-up and more robust packages respond to advanced needs.
5. Pilot the logic of your calculation
How do you provide the buyer with evidence that your financial assumptions can be relied upon? It’s a good idea to pilot your calculations with a few customers who agree to the pilot. When you test your assumptions and make sure your message gets delivered, you’ll gather valuable evidence to support your sales claims.
In the pilot phase, you will assess the suitability of your dollarization to measure your business. You specify your own views and calculation bases and ensure that you measure things that are important to the customer.
At the same time, you make sure your dollarization results are on the right acre. You will have time to specify the details later.
You act like big movie studios that show their movies to an audience and edit the movie based on the feedback. The harder you aim for a competitive market, the more important it is to find out the customer’s benefits and your own competitive advantage in a timely manner.
Is the pilot just to check the calculation?
No. Dollarization directs you to ask new questions and helps gather new background information about your client’s business. So the purpose is not just to file calculation formulas, but to open a conversation with the client and seek new perspectives.
What if dollarization produces unexpected results?
In first-stage dollarization, there are often assumptions that you refine or change in a pilot. If and when you get results that are completely different from what you expect, they should, of course, be questioned and it should be confirmed with the customer that the calculation model is logically correct and that you have understood it in the same way as your customer. At best, the unexpected result, of course, is indicative of significant observation and return potential.
What questions does the pilot project answer?
The purpose of the pilot is to ensure that you find suggestions for improvements in your customer’s operating model. Dollarization itself can be useless if it leads to any kind of activity. A good dollarization clearly shows which things will benefit your customer the most.
6.
Build a proposal based on dollarization
The dollarization you have built so far has shown your client’s current costs as well as potential savings or returns. You have also explained how the benefits offered by your service packages differ.
Your next task is to help the customer choose the right package and make a decision.
Dollarization is not just a calculation, it is based on a competitive model that eliminates the inefficiency shown by the calculation and plagues your customer.
A good dollarization is supported by a list of ways related to the stages of the service process. For example, your utility calculation may reveal that a customer spends time on automated routines. Then the seller already has a ready-made proposal in his back pocket on how to remove unnecessary craftsmanship.
The customer does not change their operating models overnight. Your job is to help the buyer move towards their goal step by step. Dollarization reveals problems and steers the right path. In addition, it can tell you, after delivery of your service, whether the customer’s discomfort improved as you promised.
How do I recognize a good dollarization?
Each part of a dollarization must answer the customer’s basic questions: 1) why the measured information is important, 2) how changing the measured item affects the business, 3) what is the good / bad value of the thing being asked, and 4) how the value can be improved.
What does a good solution look like?
Dollarization is a calculation. It needs to be supported by an expert analysis of the proposed remedial measures. A good solution is in the form that your customer can present it as it is in their management team. The proposed solution summarizes the key findings, serves the Prioritized Proposed Solutions and concretizes the scope of the investment.
What if a customer refuses to share their business figures?
Then build your calculations so that you can simulate the effects with the default numbers. However, if the customer does not provide you with accurate information, you can demonstrate the impact of your service model in the default situation. Your customer can then apply the figures you provide to their own situation. In this way, the magnitude of the benefit is usually outlined enough to take the conversation forward. As cooperation deepens, permission for more accurate measurements may be revoked at a later date.
7.Provide comparison information
Decision makers are interested in how they are doing compared to their competitors and other similar companies.
For this reason, your goal may be to collect and utilize benchmark material for sales.
It is easy to buy your service if you can show that your reference customers have outperformed the competition.
If and when your benchmark reveals the inefficiency of your customer candidate, that in itself is a strong selling point.
Benchmark also serves as a basis for discussion on a list of typical means of development and the benefits they bring.
Does our competitor immediately copy everything?
The marketing text you write for a website is easy to copy. The database you have collected from several customers and the accounting know-how related to your customer’s return opportunities, on the other hand, cannot be stolen immediately. Get the edge you need when you start now and gather the missing benchmark data from your competitors.
What if there is no comparative information yet?
Comparative data and data are, of course, not immediately available, but are accumulated one dollarization at a time. First, take advantage of the background information you gather from surveys and other sources and replace it with benchmarking information you collect over time.
Can I share the information I collect from my customers?
You cannot share personally identifiable information without your customer’s permission. If you collect comparative information, make sure it is not identifiable or combinable with an individual customer.
8. Grow your business with knowledge
Dollarization doesn’t just benefit your customers. Every calculation you make increases your customer understanding and knowledge capital. You will create an understanding that will guide your service development and delivery and help you make decisions.
Example: Is Google the most powerful car factory in the world? Hardly. Is Google in an excellent position to build a robotic car? Yes. Cars are offered by many manufacturers, but Google has excellent and unique location and navigation data for automation.
Once you’ve gathered extensive information about your service delivery, you can look for new perspectives: What haven’t we noticed before? How has the customer’s operating environment changed? What changes should we make to our service offering?
In many businesses, information has become the most valuable asset or product to sell. If your competitor is a lazy data collector, you’ll soon find a tight lead that you can’t catch simply by copying.
What the heck am I in the data collection business?
Those with knowledge also have power. Customers pay for information, so it’s worth raising knowledge capital – especially if you sell expert services or cutting-edge technology. When you deliver your commands to multiple customers and measure results, you accumulate a repository of data that your customer does not have. In a few businesses, information is of no use.
What if each service delivery is unique?
In general, service delivery has similar repetitive steps and tasks. Even if the results are unique, they often repeat similar findings or recommendations. For example, when you identify the most impressive and useful parts of your service delivery, you can turn them into new competitive advantages for your business. If you don’t measure, analyze, and compare projects, you’re likely to lose many precious observations.
What kind of tools do I need?
In the first step, Excel will suffice. Don’t start collecting data by considering the equipment, but first think about what data you are collecting and why. Then compare the results of the pilot projects and summarize the relevant findings. You can then assess whether more robust tools would be useful in making and analyzing dollarizations.
9. Take advantage of the product life cycle
What are the real costs and benefits of the life cycle of your customer’s process or product you sell? The purchase price is usually only a fraction of the cost the customer has to shell out along the way. On closer inspection, the life cycle cost of the product with the cheapest purchase price may turn out to be the highest.
Building a property is typically only one-fifth of the life cycle cost, the rest being in-service costs.
Your calculation will help your customer identify actual operating costs, including maintenance and technical support.
When you provide a lifecycle service, you also increase your own revenue. You no longer rely on product sales margins, but you help your customers with your services at every stage of use. You move on to developing customer value.
Strategic partnerships or service thinking that seeks to solve a customer’s entire problem require an understanding of life cycle value. Also
then dollarization is your tool.
I am selling a device, why would I lower my life cycle cost?
What if you sold the device as a service? Then you could increase your margins and offer your customer a unique service. It would not be easy to replace your product with a cheaper comparison if you know your customer’s operating model thoroughly and your customer satisfaction is top notch.
Why would a customer buy a lifecycle service?
Maintaining state-of-the-art expertise is expensive and demanding. It’s typically not your customer’s core business, so he or she may be willing to outsource the operation of the device. Then you have the opportunity to deepen your cooperation with your customer and increase the value your customer experiences.
Device as a service or maintenance model?
Why would a customer buy a lifecycle service?
10.
Sell results
Comprehensive knowledge and a deep understanding of a customer’s business is a resource that is hard for your competitors to copy. If you’ve followed the dollarizer’s to-do list so far, you’re in the hands of a format that strengthens your expertise and is a powerful tool for solution sales.
Your customers will appreciate service providers who know what works and what doesn’t. The buyer pays much more for the results of your service than just for the time you spend.
It’s even easier to sell when you get to the topic right away. With dollarization and benchmarking, you show that your promises are paying off. At the same time, you create realistic expectations for the subscriber.
From now on, you will sell results. You illustrate the benefits of your service package to the customer and provide a clear roadmap for your customer to increase their business revenue. With a wealth of references and stories of measured success, it’s easy for a customer to buy your proposal.
What if my client doesn't agree to a reference?
A satisfied customer usually gives permission, especially when the matter has been clearly agreed at the contract stage. Telling about success is probably in the best interest of the customer. Try to make getting a reference a habit. If, for one reason or another, individual customers disagree with your referral, you still have a strong reference bank at your disposal.
What if I can't measure results?
The outrageous promise of your service means that you believe in the results yourself and are able to measure them. You can get your service sold anyway, but measured success is a selling point that is hard to replace with other sales and marketing gimmicks.
Can dollarization cover my entire service portfolio?
You can calculate benefits for a single service as well as a combination of multiple services. It is essential that your client understands the results of your joint project. Your job as a solution vendor is to decide what kind of service package you will be able to deliver the promised results. If it is left to the buyer, he will have to spend unnecessary time and energy refueling the technical details of your service delivery.
Can dollarization cover my entire service portfolio?Our Quick Guide to Producers. They tell how big Finnish companies have built their hit products. Here are some tips and examples to help you get your service engine up and running again.
In our guides you will also find help with dollarization and examples of utility accounting in service productions.
