Our solution costs more at purchase. How do we show the cost during use?

Purchase price is one line of the cost, not the cost

A buyer comparing two quotes sees two prices because that is what the documents show. The cost of running the equipment, replacing parts, stopping for maintenance and handling failures sits outside the quote, so it never enters the comparison unless someone puts it there. That someone is the supplier, and it works only if the model is built so the buyer can audit it.

A total cost argument tends to fail when it arrives as a conclusion and to work when it arrives as a spreadsheet the customer can change.

Include only what applies to that application

There is no universal list. Start from the customer’s own process and ask which events cost money over the life of the solution. Common groups are acquisition and installation, consumption of energy or inputs, scheduled maintenance, replacement of wear parts, unplanned stoppage, training, and disposal or resale at the end of use. Drop any group that does not apply, because a padded model tends to be discarded by the procurement team.

Each group needs an owner on the customer side who can confirm it: maintenance for service intervals, production for stoppage, finance for the discount rate if one is used. A line nobody on the buyer side recognises is a line that will be removed.

Pick one window and justify it

The period decides which option looks better, so it must not be chosen to favour yours. Anchor it to something the customer already uses: the depreciation horizon, the planned life of the line, the contract term or the expected replacement cycle. If the alternatives have different useful lives, compare them over the same window and state how the remaining life of the shorter-lived one is treated, or compare cost per unit of operation instead.

Consumption, maintenance and replacement need a source

For every input, record where it comes from: a datasheet, a test report, a maintenance plan, a field record from an installed unit, or the customer’s own history. Mark each as measured, declared by the manufacturer or estimated. A declared value is acceptable when labelled as declared. An unlabelled estimate is what turns a model into a sales pitch.

Where you have no evidence, leave the field open for the customer instead of filling it with a guess. An honest blank is more credible than a precise number nobody can trace.

Each benefit appears once, in one line

To show the return on a higher purchase price, compare the additional investment with the difference in running costs, not with a list of advantages. The usual error is counting one effect twice: lower energy consumption counted as a saving and again as a higher efficiency gain, or fewer stoppages counted as avoided cost and again as extra output. Assign each benefit to a single line and note which other lines it could be confused with.

The payback period then follows from the model: the additional investment divided by the yearly difference in running cost, stated with the assumptions beside it. It is a result of the inputs, not a promise.

Worked example, with illustrative values (the figures of the table in section 07): the additional investment is R$ 120,000 − R$ 85,000 = R$ 35,000. The yearly running cost is R$ 35,000 for our solution and R$ 51,000 for the alternative, a difference of R$ 16,000 per year. Payback = R$ 35,000 ÷ R$ 16,000 ≈ 2.2 years, valid only while the stated regime holds and with unplanned stoppage and end of use left out.

When the result depends on usage, show the range

If the advantage appears only with heavy or continuous operation, say so. Present at least a light, a typical and an intensive regime, defined with the customer’s own variables such as hours per day, duty cycle or batch size. Show where the options cross. A buyer who sees that your solution does not pay back under light use may trust the intensive-use result more, and may reveal that their real regime is the one you can serve best.

A template with visible assumptions and customer fields

Use one row per cost group and one column per alternative. The columns on the right are what separates a model from a presentation: the customer validates or replaces each input. Illustrative values, over a five-year horizon.

If the customer cannot yet compare the two proposals on equal terms, the model has no solid base. In that case, begin with the proposal comparison matrix, which lays scope and conditions side by side. Evidence for the durability and performance inputs is covered in proving durability and performance to the customer. The overview of the pain is in the customer only compares price cluster.

Frequently asked questions