Understanding Friction Costs

Friction costs are a fascinating subset of a solution selling objection.

I first came across a similar theme in my early career (when selling what today is termed ERP) with the taxing issue of legacy data. Replacing an old system with a new one often gave rise to the daunting task of how and what to do with all the gobbledygook that had been allowed to spring up within the intricacies of a company’s accounts (product, manufacturing, distribution) software but which everyone knew couldn’t possibly be transferred to any new one.

It meant people were scared to buy anything new. Even though they realised they had to. The fact that any replacement system back then was appreciably quicker, simpler, tougher, cheaper, better often could not outweigh the fear of tackling an out of control yet decrepit monster.

I have this week’s freshly anointed Noblista for economics, Mr Nudge, to thank for this extra angle. (On which I first blogged a decade ago). Robert Thaler’s Nobel prize sees the broadsheets list his behavioural insights in action. Here’s one from London, in a government unit wondering why the public weren’t taking up a loft insulation subsidy;

No-one wanted to clear the junk from their loft to allow for installation of energy saving measures.

Once that barrier was removed, uptake increased five-fold.

This successful discovery was labelled as finding out the “friction cost”.

You have to think that many a solution sale has this spectre lurking somewhere in the shadows.

Uncovering it though, that may well be the tricky part.

If you’ve sold your worldbeater before, a good place to start is asking existing clients what perhaps caused them to pause.

If you’re on a more structured deal, such as responding to a tender, then friction in this sense may not be quite the ugly issue, but there still maybe the handling of other “switching” costs that can allow one bid to outscore another.

If you alone created the need then you must make the decision to know every detail of anything that you will impact, and how to mitigate the change they may perceive they’ll experience, or to trust your biggest supporter when they say “trust me”…

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