Scaling in Public Tip: Replacement Cost
Stone Payton: Welcome back to Business RadioX Pro Tips. Stone Payton, Lee Kantor here with you. Lee, here again, the Scaling in Public series has just yielded so much for us so quickly. And I’m remembering when we had Coach Maggie Ishak talk with us, and the whole session was fantastic, but I think we both really resonated with this idea of considering and helping a potential client consider replacement cost.
Lee Kantor: Yeah. When she asked us – I remember, in the episode, she asked us specifically, what would it cost a business to get all of those things that you’re offering? And that idea of calculating a replacement cost was really kind of an eye opener, because most businesses think about their value only in terms of price. But the real question is, what would it cost your customer to replace you, not just in dollars, but also in time, in money, and in systems? It’s the whole thing. What would be the cost to replace you? And a lot of folks don’t think in those terms.
Lee Kantor: So, if the customer had to rebuild what you’re providing from scratch, what would it take? How many hours? How many tools would they have to purchase to get what you’re delivering? How many people would it take to deliver what you’re delivering? And not only that, how many mistakes along the way? How much scar tissue are they going to have to get in order to get to where they are with you right now? When you start looking at your product through that lens, you often realize the value you deliver is much larger than any monthly fee.
Lee Kantor: So, here’s the exercise. Ask yourself, if a customer had to recreate this without us, what would it really cost them? That’s your true value.
