If you're even slightly familiar with business lingo, you know we often come across terms like ROI that quantify the potential benefits of a product or service. However, another term has been regarded in the same classification -- Cost of Inaction (COI). But is COI just another fancy way of representing ROI in disguise? Let's check it out!
It's not uncommon to stumble upon posts claiming that by not using a particular solution, you're missing out on substantial benefits, sometimes touted as "4X the INSERT BENEFIT HERE." At a glance, this might seem like COI, but in reality, it's a cleverly disguised ROI. COI, on the other hand, takes a step back from the product or solution being offered; it's product-agnostic and focuses on the hidden costs of maintaining the status quo.
Imagine you're in the business of selling packable raincoats, which are inherently more expensive than umbrellas, the common status quo. An inverted ROI pitch might sound something like, "Without our raincoat, you're 10 times less likely to stay dry on your commute to work. Unlike an umbrella, it fits in the palm of your hand!" It's evident how this message is heavily biased towards your product, ignoring the fact that umbrellas are a more budget-friendly alternative.
Now, let's switch to a COI perspective. Imagine you approach your potential customer with this statement: "On average, Americans own 2.1 umbrellas. Yet, only 5% of consumers bring an umbrella with them when they expect rain. When this happens, how often do we end up ordering a last-minute Uber instead of our usual walk or train? With Uber surge pricing, we spend $40+ each time to stay dry. Looks like Chicago has an average of 119 rainy days/year. How often has this happened to you on your commute?"
Notice that in this approach, we don't even mention our product (packable raincoats) yet. The primary objective here is to help the buyer evaluate whether the status quo is costly or risky enough to warrant a change. The real cost isn't the $10 umbrella; it's the cumulative expense of those $40 Uber rides every time it rains.
COI isn't a silver bullet that can convince everyone to make a purchase. In the case of umbrellas, 5% of people do bring one, some don't commute, and others might enjoy the occasional rain shower. This underscores the importance of carefully targeting prospects based on their likelihood of feeling the pain associated with the status quo.
Moreover, the tone of your message is crucial. Instead of telling potential customers that they are wasting money on Ubers, you're asking them, "how often does this happen to you?" This subtle shift in approach opens the door for prospects to consider the pros and cons of alternative solutions, one of which happens to be your packable raincoat.
In the world of sales, it's essential to move beyond the hype and understand the real value of concepts like Cost of Inaction. COI isn't about pushing your product; it's about helping your potential customers recognize the hidden costs of maintaining the status quo. By approaching prospects with a genuine concern for their pain points and providing them with valuable insights, you can make your solution more appealing and valuable in their eyes. So, the next time you hear about COI, remember that it's not just a fancy buzzword but a powerful tool in the world of sales.