As a rule of thumb, you can only capture a portion of the value that your customers get from your product.
In other words, if your customers save $500k a year because of your product, you can only ask for a fraction of that amount.
Understanding the value of your solution means understanding its organizational impact. Will only one person be impacted? A whole department? The whole company? How much time can be saved? How much more revenue can be generated?
Products that can generate a high Return on Investment (ROI) have the most impact, and solutions that can make an economic buyer or someone influential look good or reach their annual objectives are the easiest to sell.
If your solution is not moving the needle, it’s not worth pursuing. Your target customer must be able to benefit from your product.
To understand the impact of your product, fill out a solution impact grid as follows:
As your customer base grows, ask yourself:
- How did the world change for our customers after we solved their problem?
- What kind of ROI did they receive?
- Who benefits the most from the solution?
- Who looks good in the process?
In B2B, we’re looking for a big pain or a big gain that can be tied to a budget, a problem that will deliver a big ROI. Looking at the impact of your product on organizations is a great way to set the price tag for your solution.
More on The Investment Matrix
- Why Most Startups Selling to Cost Centers Fail, And What to Do About It
- How to Raise a Seed Round in B2B
- What Makes a Great B2B Value Proposition in The Early Days of Your Startup?
⚡⚡ Enjoyed this content? I go into way more detail on this subject in Lean B2B. It covers the ins and outs of finding traction in the market for B2B products. Check it out »
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