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Algorithm for Identifying Benefits and Costs


J: I used a simple algorithm to identify benefits and costs.


N: Tell me about it!


J: First of all, I found out from you who buys your goods, what he does with it, and why he does it. With these questions, I found out who your Target Consumer is, what kind of Job-to-be-Done he performs with your Product, and what Need he satisfies.


N: Well, I understood that. What was next?


J: Next, it was necessary to identify advantages and benefits. In this part of algorithm, I used simple logic. Your product differs from others. What is the use of differentiating features? If the consumer doesn’t use these features, there is no benefit. All your efforts are wasted. The differentiating features could only benefit when the consumer uses them. What does “uses” mean? He can do something that he could not do with other similar goods. This new opportunity is meaningful if he can better accomplish his job. And why should he do the job better? To better satisfy the need. This is a direct benefit.


But the benefits do not end there! If he better satisfies one need, he can at the same time better satisfy his other needs. These are indirect benefits. I have a list of typical benefits. I went through it and asked you if a customer can gain one or another.


N: Interesting! Why did you need to talk about costs? We always try to avoid it!


J: It’s unwise. The buyer always thinks about costs. He compares the promised benefits with costs and inconveniences. Then, he buys only if the benefits exceed the costs.


N: Do you also have an algorithm for costs?


J: Yes, of course. You listed all the costs, so I did not have to use it. The idea of this part of the algorithm is simple. Each product has its own “life cycle,” from purchase to replacing it with a new one. And I just ask for each stage: “What additional costs the customer incurs with your product at this stage?” You listed three types of additional costs: price upon purchase, occupied space during storage and transportation, and weight while transported to and from the place of use. That was enough.


N: How easy!


PART II. Technology Under the Microscope | 13 Dialogues on Win-Win SalesDialogue 4. Why Does the Buyer Object?

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