Arithmancy: The Magic of Numbers!

How a Little Goes a Long Way

 

Some years ago, there was an explosion of interest in electronic health record (EHR) software, driven partly by government regulation and incentives. EHR software is what you see on your physician’s computer screen that lists your medical history, medications, test results, and similar information.

 

During discovery conversations, doctors confirmed that by using these EHR systems they could easily trim a few minutes from writing-up and entering their notes after each patient visit. A Delta of three minutes was often the agreed-upon amount of improvement. Amazingly, many (many!) EHR sales were based on saving these three minutes per doctor-patient interaction.

 

Just three minutes: That can’t yield significant gains, can it?

 

In the U.S., a typical doctor might see fifteen patients a day. If three minutes are saved with each interaction, that amounts to recovering forty-five minutes each working day. At 220 working days per year, that’s 165 hours per year, per doctor.

 

The average U.S. hospital has about 135 doctors, so 135 doctors x 165 hours/doctor = 22,275 hours saved per year for that hospital. There are about 1875 working hours per year, giving us 22,275/1875 = ~12 doctors. That’s like getting twelve “free” doctors without any additional hires!

 

The average doctor’s salary in the U.S. is ~$200,000. Assuming a (very low) burden of 50%, each doctor costs the hospital $300,000 annually. So, the ability to gain twelve “free” doctors amounts to avoiding spending $3.6 million annually.

 

That’s right: three minutes saves the hospital $3.6 million through avoiding the need to hire twelve additional physicians!

 

That’s a cost-avoidance approach. A second, incremental revenue approach is even more compelling: Each doctor generates about $2 million annually. So, the equivalent of twelve additional doctors generates $24 million in incremental revenue, without adding a single new physician.

 

Abracadabra!

 

The magic of numbers: The three minutes saved with each doctor-patient interaction generates an additional $24 million annually! (That’s a big rabbit you just pulled out of your hat!)

 

 

And here’s how to uncover the numbers in your discovery conversations!

https://www.amazon.com/Doing-Discovery-Important-Enablement-Processes/dp/B0B8RJK4C2/

 

Which Vendor Statement Has More Impact?

 

Compare these:

 

“If you buy our software, you’ll save time and money…!”

 

“If you implement our software, it looks like you will reduce your project completion time by 20%, you can redeploy 4 FTE to other more valuable tasks, and you will save over $750,000 annually, based on the numbers you provided.”

 

The difference between these two approaches is striking and has a huge impact on your prospects’ perceptions of value!

 

Sales, presales, and other customer-facing staff are repeatedly urged by their managers to “communicate value.” Some players fail completely and only present features: “We have this fabulous Biframulator function!” This is a far-too-large population.

 

Others try to communicate value, but their statements are meaningless: “With our Biframulator feature you’ll save time and money!”

 

A wiser population of vendor staff offer benefits statements that match capabilities to prospect needs: “And you told us that the Biframulator capability is an important part of your solution.” This type is better, because it shows that some discovery was completed and acknowledged. However, as a value statement it is still insufficient to support buyers’ cost justification requirements.

 

Solution Selling, CustomerCentric Selling, and other sales methodologies define the differences between features, advantages, and benefits as: 

 

·      Features are descriptions of the capabilities offered in a product or service.

·      Advantages are the gains or improvements that a customer might enjoy but lack the prospect’s confirmation of need.

·      Benefits represent the value a product can provide that includes your prospect’s confirmation of the need, and its tangible value.

 

Here are examples of communicating value following these definitions:

 

·      Feature Approach: “With our Biframulator, you’ll save time and money…!”

·      Advantage Approach: “Some of our other customers have saved thousands of dollars with our solution.”

·      Benefit Approach: “It looks like you’ll save over $750,000 annually, based on the numbers we discussed.”

 

Question: Whose numbers are most believable?

 

·      Feature Approach: Nope, it’s just an empty claim from the vendor.

·      Advantage Approach: Better, since the numbers (in theory) came from another customer and are therefore a bit more believable.

·      Benefit Approach: Best, without question, because the numbers came from your prospect!

 

Newly minted vendor customer-facing folks tend to start with feature statements. Vendor staff who are still junior, but developing, seek to avoid feature statements and focus on advantages and benefits. Seasoned veterans know that benefit statements have the most influence and guide their conversations accordingly!

 

And here’s how to uncover the numbers you need for benefit statements!

https://www.amazon.com/Doing-Discovery-Important-Enablement-Processes/dp/B0B8RJK4C2/