SSA#17: Cost Of Inaction

Create Buyer Urgency

How to leverage Cost Of Inaction to close deals.

Happy Tuesday to 9,200 sales professionals!

Today's newsletter focuses on the one and only thing you need to find in your discovery calls. This one thing will help you close larger deals, close them faster and at a higher conversion rate. Let's go👇


COI Is The New ROI

I remember the Golden Age Of SaaS from 2010-2020: the greatest bull market in history, VC money was plentiful, and companies had a lot of cash to spend.

Unfortunately, this age is over. We are now in a period of cost saving and tech stack consolidation. Companies are no longer looking for nice-to-haves. They only consider the absolute must-haves.

Therefore, ROI (return on investment) is no longer a strong decision criteria. CFOs don't want to spend $1 to make $2 more revenue - they don't have the $1 to spend in the first place.

So who's the new kid on the block? His name is COI (Cost Of Inaction). COI is the number 1 driver of deals in this economy.

We're going to take a closer look at COI, how to find it and how to leverage it to close deals successfully - despite the recession.


Step 1: Understand C-Level Objectives

The first step in every discovery call is to understand what's top of mind for the leadership team.

  • Are they trying to grow the team?
  • Are they trying to reach profitability?
  • Do they need to satisfy investor targets?

Whatever their number 1 objective is - your value proposition needs to align with that. Otherwise, game over before you even started.


Step 2: Find Risk

The 2nd step is to identify what could go wrong.

  • What are the challenges related to growing the team?
  • What puts reaching profitability at jeopardy?
  • What risks are out there to prevent them from hitting investor targets?

As soon as you find risk, latch onto it. This is your only chance of survival.


Step 3: Understand Present State

It's important to understand where the risk comes from.

  • Is it a tech-related issue?
  • Is it a process-related issue?
  • Is it a people-related issue?

Understanding root causes will tell you a great deal about solution fit, aka: are you well positioned to solve the problem in the first place?
(If not, walk away NOW.)


Step 4: Understand Future State

What would be the ideal situation for the prospect? Free of risk, free of problems, challenges and obstacles.

A direct result of comparing Present vs. Future State is Cost Of Inaction (COI). In other words, the opportunity cost of not making a decision.

I'll give you a quick (real-life) example of a one of my past customer conversations:

Me: John, thanks for taking the time today. What made you take the call?

John: Thanks, Christian. We need to improve the way we do forecasting. (Painful problem)

Me: How so? What’s wrong with the forecasting?

John: There’s a time delay in our forecast. This sometimes causes inaccurate forecasting (business impact)

Me: What causes the time delay?

John: We don’t see pipeline generation and revenue in real time. (Root cause). It’s my job to consolidate the numbers at the end of the month. It usually costs me a couple hours on a Friday, and sometimes I make mistakes (personal impact)

Me: Mind sharing how your team performed last month?

John: We fell 20% short of our pipeline generation target (business impact).

Me: What was your target?

John: 1 million USD.

Me: Do you know your average closing rate?

John: We usually close 25%.

Can you tell what the cost of inaction was for John's company if they did not fix their forecasting issue? 



$1M/month pipeline target * 20% shortcoming = $200k in missed pipeline/month

$200k missed pipeline * 25% closing rate = $50k in missed revenue/month

Cost of inaction: $600,000 p.a.


Yes, this is a simple example. The reality will often be more complex.

But this is how you need to think about COI: you literally need to attach a number to the problem.

This is the first step to building a solid business case. Without it, your chances or surviving the CFO's judgement call are low.


I hope you liked this newsletter! Please shoot me a message with some feedback.


Want to work with me to systemize your sales success without burning out?

Book a free Strategy Call with me to see if you're a fit for my private coaching program.



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SSA#36: Cost Of Inaction

May 15, 2024

SSA#35: SPIN Your Discovery

May 07, 2024

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Christian Krause

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