Total Cost of Ownership

cost versus benefitsFor the last 30 years or so in the semiconductor industry we have sold a concept that might just have been wrong! This is a mindset shift that we can make now and that could easily have been of great positive impact had we recognized it much earlier. And this shift in thinking that I will propose could easily apply to any number of industries and market places.

As always with shifts in thinking, not everyone will understand the differences, or choose to accept them, and that is quite OK. And those that do (you) will benefit from the shift in methodology that this shift in mindset sets up.

So what is this epiphany?

In our past, we have worked to make sure our clients were fully informed and understood the TRUE Total Cost of Ownership. Total Cost of Ownership discussions required us to put negative facts on the table that the people we were working with may or may not have actually taken time to include in their analysis of the choices they had made. Most of the time, as sellers of the “preferred” solution, we detailed a specific, unrecognized, significant cost factor that raised the costs of the “other” solution when factored in.

In the case of the semiconductor industry, in the early days of the concept of “field programmability” we pitted our “flexible” solutions against the non-flexible offerings of what were called mask programmable solutions. The true cost of ownership of a mask programmable solution actually included many elements that were not normally included in the price comparison at a piece by piece level. There were up front manufacturing costs in the “other” solutions that would be thousands of dollars, there could be the scrap costs as many times these less flexible solutions needed changes to finally function. It was really an easy conversation to have.

And in actuality, it probably was NOT wrong for its time. Those were different times, and we were selling an education, not just products in these cases.

That was then, however, and the same old thinking will NOT get us where we need to go today. Talking just about cost is the same as talking just about price. We need a different perspective – a differentiated perspective if you will.

So, no more Total Cost of Ownership.

Its time to change the words, that will change the thinking, that will change the actions, and get the results we want.

So instead, we need to talk about Total Benefit of Ownership.

A minor shift in words and a huge shift in thinking, discussion, and action.

If Total Benefit of Ownership is BETTER, BEST is Total Profits Added.

You can easily imagine the 2-way conversations that you will now have with a client when you start to position your answers to their needs in terms of the benefits that can be achieved by the client when they execute on the ideas that you CO-CREATE with them.

That focus on achievement outcome from a positive perspective is only made more powerful when you, together, take the time to specifically spell out how the impact that actions taken in the directions created by you and your client will actually generate ADDED PROFIT of $$XXX. Not just revenue, but bottom line profit. Having that level of discussion and spelling it all out at that detail level demonstrates your complete commitment to the success of the client and the people you are serving.

As you do this, you can rest assured that you will be in a unique perspective with your client, as everyone else is stuck back at product features, benefits, and cost.

You WIN!

Time for a discussion about TOTAL BENEFIT ADDED!

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