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Income from Outcomes – It enables your business customers to thrive whilst increasing your company’s revenue and bottom line.
Whenever there is a commercial transaction of any type, there’s an outcome. For example, if you buy a hamburger, you want to be full. That’s an outcome. If you buy a cinema ticket, you want to be entertained. If you buy a sports car, you probably want to be noticed.
We deal with two different types of outcomes in B2B environments.
The first is a Product Outcome, which is the direct benefit of using product or service. The second we call a Success Outcome, which is the bigger outcome the customer is trying to achieve. Your products are a means to this bigger outcome.
Imagine you go to a hardware store to buy a drill bit. You don’t want to own a drill bit for its own sake, you want to drill a hole. If the drill bit works as it should, you will have a hole of a specific diameter. You paid for the drill bit, it worked as it should, and you have a hole. That’s a Product Outcome.
But who just wants a hole? What we wanted to do was hang a picture. When we can step back and admire our handiwork, we’ve had a Success Outcome.
We did not buy a drill bit to get a hole in the wall; the drill bit was a means to an end. We wanted a framed picture hanging on the wall, looking great.
Imagine you sell the ingredients for the finest pie crust. But people don’t buy pie crust ingredients just to make pie crust. They buy the ingredients so they can make a pie. Making a great pie crust is a Product Outcome. But enjoying a delicious pie is the Success Outcome.
But it looks terrible. You’ve hung it in the wrong place. The next time you have handiwork to do, you might hire a handy person. And not go back to the hardware store for more equipment to do it yourself.
You won’t spend more money at the hardware store. The drill bit you bought worked and delivered the Product Outcome of a hole in the wall. But you did not achieve the Success Outcome because the picture did not look great. The failure to achieve your Success Outcome will cost the hardware store future revenue- through no fault of its own.
Similarly, let’s consider the pie. Imagine you have served your friends or family a slice. They have a look of expectation on their faces. They taste the pie, and their faces tell the story. The pie tastes awful. The pastry was great, but something else went wrong. It’s a disaster! You were expecting plaudits. Everyone tries to be polite, but you feel terrible.
The next time you’re entertaining family or friends and you need a pie; you will probably buy one from the bakery. The seller of the pie crust ingredients will lose future revenue, even though the pie crust was perfect. The Product Outcome was achieved but the Success Outcome wasn’t.
It’s easy for the customer to blame the products or services rather than accept responsibility themselves.
That puts your future revenue at risk. Lack of success means the customer may cancel their subscription. Or reduce the number of seats or licenses. Or just stagnate and not grow their investment with your money. Each will cost you money. It’s the Success Outcome, not whether your products or services performed, that determines future revenue.
There’s a simple message from these examples. You should be crystal clear about the Success Outcome you help customers achieve. And do everything possible to help them achieve that Success Outcome.16
The difference between the Product Outcome and the Success Outcome are all those other elements the customer needs to get right.
Paul is a speaker, consultant, and author. An abridged version of his latest book Income from Outcomes: Tap Into Unrealised Income from a Customer Outcome Program can be downloaded here.
Published January 11, 2023, Updated January 17, 2023
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