THE COSTS OF DOING NOTHING Is Status Quo The Low-Cost Option?

Is the cost of doing nothing or remaining with the status quo really zero? Certainly, there may be times when the cost of remaining with the current situation, system or arrangement is zero, but that is the exception, not the rule.

In classical economics we learn that an opportunity cost is the value of an alternative that you did not choose when a decision is made or simply what is sacrificed in order to get something. So, remaining with the status quo is not likely to be zero.

The likelihood of a salesperson turning around a decision to stay with the status quo is greater than that of a choice to go with another supplier. To do so, the salesperson needs to examine 5 factors that may not have been considered by the buyer:

  1. Procrastination is not a good long-term solution for the buyer; if there is a problem and it is not fixed it does not disappear. The problem will still need to be addressed later, costing additional resources to once again conduct an evaluation and choose a solution. And, if the problem exacerbates the cost could even go higher.
  2. The buyer must consider both explicit and implicit costs. Explicit are those that we write a check for and implicit are those that are hidden or indirect. Implicit costs are often overlooked.
  3. We need to examine the benefits that were not realized by not choosing the next best alternative. This is not only the ROI; it could be the revenue that was not realized from a decision to postpone the introduction of a new product or entry into a new geographical market.
  4. Were there signs that this was going to happen that the salesperson ignored? If so, this was a lesson for the salesperson to be more observant and pro-active next time. Or, was there a flaw in the decision process? Were certain costs or suppliers not considered? Was the decision not elevated to a high enough level? What was the procurement department’s role in the decision? Normally their role is to find the best price for the businesspeople, but sometimes they obstruct the decision to purchase. Or, did someone on the prospect’s team not hold up their end of the evaluation process and some information was omitted? If any of these conditions are true, the decision was flawed.
  5. Some may believe that the status quo is the “safest” solution. After all, that is what the company is working with now. Everybody knows it, may be comfortable with the process – and it does not require a disruption for training or to the facility. But believing it is the safest ignores both the consequences of a short-sighted decision as well as the benefits foregone.

If the prospect has decided to stay with the status quo – do nothing at all – then the next best step for a savvy salesperson is to determine what really caused this decision by contacting the people on the project team, especially the “change agents,” – and your coach. The real reason may be different from what you have been told. Once you have this information you should contact the project’s executive sponsor and politely ask if it is too late to consider the relevant factors mentioned above. If it is not, you can explain any information that may have been overlooked by the team when the decision was made.

By approaching the sponsor in a consultative manner, you are demonstrating that you have their best interests in mind.

Some salespeople react very negatively to the choice to do nothing and insult the validity of the decision and perhaps the credibility of the decision makers. This short-sighted unprofessionalism will almost always backfire. In one case, when my competitor brought in former President Gerald Ford to call on his friend, their CEO, their attacks on the wisdom and character of the project team caused the decision to change from 2-1 against my company to 3-0 for us.

If the prospect does not re-consider their decision now, then it is likely at some point in the future the evaluation process will restart and your professionalism in handling the situation could lead to the selection of your solution, perhaps even without considering the other competition.