The Shortcomings of Simple Payback Period

I’ve written several blogs about the perils of using Simple Payback Period (SPP) as a metric when evaluating proposed expense-reducing projects. I keep returning to this topic because so many efficiency salespeople still use this inferior yardstick, in many cases because they don’t know how to migrate the discussion from simple payback to a more proper metric. Today, we’ll discuss several shortcomings of SPP. Keep these concepts in mind the next time you encounter a prospect who insists on evaluating your project using this broken metric.