Success Story: How One ERP Vendor Proved Value to Prospects

How much time and money does your company waste each day?

We all like to think that our companies are models of efficiency and that we’re maximizing profit potential in all areas. But that’s simply not the case.

One of my clients, Tim Reynolds, President of Tribute, recently told me that many industrial distributors fail to realize how much time and money they waste every day. He added that they also don’t realize the magnitude of savings that an enterprise-wide distribution management (essentially an ERP system) solution like Tribute can provide.

This is a common problem for B2B organizations. How do you convey your value? How do you help clients solve problems they’re not aware of, or that they don’t want to acknowledge.

A great place to start is numbers. One thing B2B leaders understand is a balance sheet and business cases. We worked with Tribute to create a custom ROI calculator, which they made available on their website. Now, any industrial distributor can use the calculator on Tribute’s website to quantify potential improvement to their profitability.

The ROI calculator helped Tribute in two ways. First, it assured prospective buyers that the changeover costs incurred to deploy Tribute’s solution would be recouped, and in a short time frame. Second, the ROI calculator helped Tribute highlight the unique ways its software provides real, bottom line savings.

Today, Tribute’s sales team uses its custom ROI calculator in meetings with prospects. The tool shows prospects much money they can save in a three-year period in different areas (such as warehouse and assembly labor, scrap material costs, inventory management, and more). And prospects receive a report that serves as a business case and includes key financial metrics such as net present value (NPV), ROI and payback period.

One of the biggest challenges that sales reps have is showing value using legitimate or believable numbers with prospects. Tribute’s reps can be confident that the numbers they showcase using their ROI calculator are generated based on industry average data culled from trade-association reports and firsthand discussions we had personally with numerous existing Tribute customers. This way, the sales team can use this data to create a reasonable scenario ahead of time and then refine the calculations during the sales event.

In fact, during one such discussion, when a Tribute sales rep was talking about the value enabled by one of Tribute’s unique features, the business owner had a eureka moment and made a buying decision on the spot. Success stories such as these show that value-based selling really does work in a B2B setting.

How do you use numbers to prove your value in prospect meetings? Leave your thoughts in the comments section or feel free to email me at dsvigel@stratavant.com.

Throw out the Sales Process and Embrace Your Prospect’s Buying Process

The sales process (or more accurately, the buying process) has two critical stages:

1)     Awareness: Your prospect becomes aware that a problem exists, or that a product or service exists to solve a problem that he or she has.

2)     Interest and Education: Your prospect becomes interested in learning more, and seeks to become educated on what products and services are available to solve the problem.

Call them what you want, but most prospects will go through these steps.  Historically, marketing would launch campaigns to create awareness of your offerings. Those campaigns would help generate leads.  Those leads would then be passed over to your sales team to follow-up to educate the prospect on why your offering was the best solution to their problem.research

But today, leads are typically not captured at the end of the Awareness stage. Why? Because the interest/education stage of the buying process is now largely self-service. Prospects don’t need, nor do they want to engage with a vendor, and certainly not a salesperson, during the education stage.  They want to research what others are doing, what solutions are available, and narrow down their options to a manageable few.

Companies must now go beyond just lead generation (no matter how difficult lead generation is, it isn’t enough today) and guide buyers well into or even through the education stage of the buying process, most likely without ever having the opportunity to talk to them. Sellers cannot rely on the assumption that their reps will get the chance to educate potential buyers. Today, education is happening online. Blogs, white papers, Webinars, and our own ROI calculators are all tools companies can leverage to enable prospects to self-educate.

A common theme over the last ten years in sales was that you needed to establish yourself as a “trusted adviser” in order to be successful.  The way to do that was to dole out information carefully. You never wanted to give away too much. But anyone who follows that advice today will never get a seat at the table, because it is highly likely that someone else will freely give them that information and advice.

Even if your sales rep lands a meeting before the education stage, buyers will almost certainly go online to find out what people are saying about you and your company. If you’re not putting your thought leadership and content out there, then you’re losing an opportunity to educate and engage.

Some B2B companies today — particularly in non-tech industries — continue to systematically block their reps from being able to engage with prospects and customers online. By default, they prevent access to social media networks and even some parts of the Internet from the office because they’re afraid of losing control over their voice in the market, or more often they believe that people are merely wasting time when on the Internet. I think these companies are limiting their ability to sell in major ways. Buyers are already doing research online. The question is, are you part of the conversation?

Thinking about the buying process exclusively from the seller’s perspective has become an exercise in futility. Customers today will not follow your selling process. You have to think about it from their perspective and how they’ll go about buying. Prospects will be most attracted to companies that can demonstrate an awareness of the way they prefer to buy, and provide them with the tools and content that they need to make an informed decision.

What are you doing at your company to cater to the new way that prospects buy? How has your sales process changed to adapt to their needs?

Don’t Panic When Your Prospect Asks to Revise Your Business Case

At a certain stage of the deal, there are a few things buyers sometimes say that make sales professionals panic.

penny on chartOne of them is when the potential buyer comes back and asks you to rework the numbers in your business case. For example, let’s say you’re trying to sell a very expensive solution into a big account. Let’s say this solution will help save the prospect $1 million each year. (Again, these cost savings are your business case. As I pointed out in a previous blog post – http://roi-selling.com/2013/02/07/closing-the-sale-facts-versus-emotion/, it’s very important to have your business case ready so you can use facts to justify your value to the high-level finance executive who will likely be examining all the paperwork related to the potential deal with a fine-tooth comb. If that executive sees he or she can save $1 million, you’ve paved the way for a successful close.)
However, let’s say your stakeholder comes back to you and suddenly asks for a business case to support $500,000 savings, rather than the full $1 million. At this point, many sales professionals start to panic or worry that their deal is losing credibility.

Based on what I’ve seen, that is not necessarily a cause for alarm. In fact, this might even be a good sign. The reason sales professionals don’t realize this is that they don’t understand the kinds of internal conversations that are going on in the prospect’s company. It’s very likely that your sponsor/champion remembered back to a previous project authorization and the CFO asking them, “ OK, that sounds great. So because this will save your department $1 million next year, I am going to cut your budget by $1 million.  Do you still want me to approve this project?”

Naturally at that point your sponsor might rethink the business case a bit if they hadn’t already built-in a buffer. A business case that supports a half a million dollars in savings would leave them some room for error and, if the original estimate were correct, some excess funds for the year. That’s often why the sponsor returns to the sales rep and asks, “I want this business case to be more conservative.  Can we cut the savings in half?”

Always remember that you don’t necessarily know what conversations are happening internally among prospects. This isn’t really your business case. It’s your prospect’s business case. They need to own the numbers, because they understand all the moving parts involved in partnering with you on adopting a new, expensive technology solution. Your goal should be to give your internal sponsor whatever props he or she might need to put on a successful performance for the CFO (or whomever will be signing off on the final decision).

The next time your deal seems like it’s headed south based on a request for a revised business case, don’t lose confidence. It could be that this is actually a sign that you’re moving even closer to closing the deal.

Can you remember a time when you thought a deal was taking a turn for the worse? Did a strong business case help you? Share your thoughts in the comments section. 

Closing the Sale: Facts versus Emotion

When it comes to making headway with stakeholders in an account, there are always two issues sales reps must confront: hard facts and emotion.

As an example, let’s say a company is considering replacing its current CRM system with your CRM. One of the primary considerations for you (the sales rep) is who was involved in choosing and implementing the existing CRM system.

Why does this matter? Let’s say the Chief Information Officer spearheaded the purchase of the original CRM system. This CIO might feel conflicted about what a switch to a new system might mean. He or she might think, for example:

It was very difficult to convince our team to adopt our current CRM. (Implied feeling: Frustration at the thought of facing the same difficulties again.)

If we change to a new CRM, it means I didn’t do a good job selecting our current CRM. (Implied feeling: Negative self-worth and feelings of inadequacy or failure.)

In other words, the fact that this person was involved in the original decision to purchase the existing CRM could affect the way he or she thinks about changing over to your CRM offering.  Each of these thoughts might be attached to a possible feeling, and those feelings might translate to objections for you as you’re trying to move the deal to the next step.

The problem is that people are often either not aware of their feelings, or they don’t articulate them. On your end, it’s difficult to address the CIO’s feelings of inadequacy or negative self-worth if the objection you hear is, “We don’t have the budget for this right now.”

There are lots of great sales-training resources out there that offer solid advice about how to deal with overcoming objections and master the psychology of selling. (If you’re interested in those subjects, here are some good links to check out, “Defining Consultative Selling,” http://www.vitoselling.com/, http://scoremoresales.com/).

What I can tell you is that, for every stakeholder who’s driven by emotion, there’s usually a corollary stakeholder who wants to see numbers. And when your stakeholder is driven by numbers, it can be extremely helpful to have your business case prepped ahead of time so you can illustrate the value of your offering in terms of financial impact.

business people with chartsThe Chief Financial Officer (CFO) is often the approving authority of the business case. The personality of a CFO is typically less responsive to emotion and feeling and more responsive to hard facts. These folks want to see on paper the ROI of a potential investment in an expensive technology solution.

Even if you’re not talking directly with the CFO as you move along in the sales process, it’s important to have that document available to your champions (i.e. stakeholders on your prospect’s team who are highly interested in adopting your solution and are thus “on your side”) to justify the investment to the CFO.

Learn more about how a value-based selling approach can be enhanced by our ROI calculators