The Cost of Inaction (COI) has been gaining a lot of traction on social media lately. While it may sound like a new thing, COI is actually a well-established principle with roots outside of sales, emphasizing the negative consequences and missed opportunities resulting from failing to take action. Over the last 10+ years, it has become an essential concept in sales, especially enterprise sales, and when used strategically and thoughtfully it is a powerful ally in helping progress sales deals.
COI vs. Loss of ROI
COI is often confused with the loss of ROI. However, COI is not about missed ROI. Instead, it focuses on the negative impacts and risks associated with sticking to the status quo. Understanding COI involves assessing the consequences a prospect or client faces if they choose not to act. To give proper context to COI, let’s look at an example of COI and the origins outside of sales.
Origins and Context of COI
The term “Cost of Inaction” has been used in various fields like public health, environmental science, and economics for years. One notable example is a project by the FXB Center for Health & Human Rights at Harvard University in 2008. Directed by economists, this project aimed to quantify the social and economic costs of failing to address public health needs, particularly for children affected by HIV/AIDS. This framework highlighted the importance of understanding COI to guide effective policy making and mobilize support for necessary reforms.
In sales, the concept of COI gained foothold in the early 2010s. Sales professionals recognized the necessity to not only demonstrate the benefits of their products but also to articulate the risks and costs associated with not making a decision or sticking with the status quo. The idea of the approach is to help frame the urgency of the solution being offered, making it more compelling for potential buyers to act quickly.
Applying COI in Sales
Using COI in sales involves more than just listing nebulously defined losses such as ‘you’ll lose 10 hours of time’. It is about creating a structured calculation that highlights the risks and costs of inaction, making it clear why change is necessary. In that regard it is very much facilitated by creating a sound MAP (Mutual Action Plan), a topic we wrote about in this article [link] in more detail.
Here’s how MAPs can help with COI:
- Clear Roadmap: MAPs provide a step-by-step plan that aligns both parties on key milestones and deadlines. This allows reps to clearly articulate the risk of not taking specific steps and actions. This also helps build the case of Cost of Inaction over time. For example, if the prospect or client misses their go-live date what are the consequences? Based on this we can help keep deadlines leading up to the close of the sale on track.
- Collaborative Approach: Co-creating the MAP builds trust and demonstrates commitment. MAPs are also about the customer, just as COI is. This collaboration helps identify consequences that will matter to each stakeholder and the business as a whole.
- Structured Business Case: MAPs help outline the business case by detailing benefits, ROI, and success criteria. This format also lends itself to outlining the risks, consequences, who will be impacted, and the specific COI should they not move forward.
- Proactive Risk Management: MAPS help identify and address potential roadblocks early, and this includes the perception of how problematic (or not) it is sticking to the Status Quo.
Using the PART Framework
To help structure the approach and establish COI, we love to leverage our simple, yet powerful PART framework:
- Problem: What is the current problem the prospect or customer faces?
- Action: What past actions have been taken to address this problem? What future actions can be taken to rectify this problem? What happens if no action is taken?
- Result: What is the end result of solving this problem?
- Trigger: Why is it important to solve this problem now?
If you are curious about our PART framework, we have a more detailed blog article that you can check out here.
Examples and Tactical Tips
We know an example is worth a thousand words, so to provide a better understanding of the COI concept, consider the following example:
Imagine you’re a rep for RevIntel, selling call recording and revenue intelligence solutions to Martech Co.
Problem: Martech lost 10 opportunities last quarter due to a lack of visibility into prospect calls, leaving them at 30% of their annual quota.
Action: Leadership asked managers to join prospect calls to assess the reasons.
Result: This approach didn’t scale, causing too much burden on managers, leading to turnover, and negligible improvement in opportunities.
Trigger: With the EOQ approaching, Martech must hit its quota to secure investment and avoid layoffs.
By framing the COI as above, with clear articulation of the prospect’s current state and the urgency of addressing their problems, you can now embark on more effectively driving the decision-making process. You can also begin to quantify COI as described in this video.
Overcoming the Status Quo
Losing to the status quo often stings more than losing to a competitor because it feels like a missed opportunity. To combat this, it’s crucial to clearly articulate the COI and ensure it resonates with the prospect’s needs and pain points. Engaging multiple stakeholders and aligning the message to their specific concerns can help create a compelling case for change.
Ignoring the Cost of Inaction can cost you deals. By understanding and effectively communicating COI, you can highlight the urgency and importance of taking action, making your solution more compelling to prospects and clients. We hope that delving deeper into tactical tips for addressing COI and sharing practical examples will help you incorporate this powerful concept into your sales strategy.
For more on this and other revenue topics, you may enjoy our Quest to Quota Attainment Course which is broken up into short modules making it easy to learn and practice new skills in short but effective time blocks each day. And finally, if you need hands-on support for your revenue-generation efforts, check out the services we offer.
