ROI Selling: Four Opportunities to Advance Your Sale

When customers make a purchase, they typically go through a few different stages. As a seller or marketer, your job is to help shepherd the customer through these stages quickly and efficiently.

Based on our experience, here are the four most common stages of buyer purchasing behavior, plus the tools you can use to advance the sale to the next stage.

1. Customer assesses the problem.

In this stage, the customer is trying to assess the problem and figure out how their performance compares against benchmarks. At this stage, a simple assessment tool can help customers get a feel for how they’re performing in the market.

(To capture more leads from your website, provide visitors with an assessment tool.)

2. Customer quantifies the value of the problem.

At this stage, the customer is saying, “This solution looks interesting … but is it worth it to me to implement it?”

This is when sellers and marketers must quantify the value of the problem for prospective buyers. In other words, if the prospect were to solve this problem, how much money will they either be able to potentially make or save by doing so?

It’s important to note that when customers quantify value, they’re simply trying to figure out how big the problem is. Is this a two million dollar problem, or a 10 million dollar problem? (Note that you’re not yet discussing how much investment it will take to fix the problem — that happens at the “justify the cost of making a purchase” stage, explained further below in this list).

(To capture more leads from your website, provide visitors with a value calculator. )

3. Customer compares alternative solutions.

Frequently (but not always) customers reach a stage where they want to compare offerings. Essentially, at this stage you’re trying to show the customer why this company should buy from you and no one else. Your Company has one offering; XYZ Company has a similar one: which one is best?

At this point, we advise using a TCO (total cost of ownership) tool, which will provide calculations showing the value of one solution over another, over the same time period.

(To close more competitive deals, provide your sales team with a TCO tool. )

4. Customer justifies the investment.

One of the final questions a customer will ask is, “Is there a cost justification for me to make this investment?” In other words, the customer wants to know what the return on the investment will be if he or she buys your solution.

Unlike the stage above in which the customer assesses value of the problem, this stage identifies the cost involved in investing in a solution to that problem. In other words, the problem could cost $5 million, but if the solution requires $10 million to solve, the company should probably address another area or spend resources elsewhere. On the other hand, a problem that costs $2 million and only would cost $150,000 to solve would be worth doing something about. (A good rule of thumb is to ask yourself whether or not you’ve made a case that will cause any Chief Financial Officer to sign off on a major expenditure.)

(To close more deals rather than losing to “no decision” provide your sales team with an ROI calculator.)

Many sellers and marketers won’t have to use all of these tools — very commonly our clients end up using just two or three tools in combination. For instance, a TCO tool is not really of interest unless you’re losing lots of bids to competitors. Similarly, if you’re losing business to “no decision,” or only have a 10% close rate on a large funnel of opportunities, then you need an ROI tool to help you justify the cost of investing in your solution.

Also, not all customers go through each of these stages. Some customers, for example, go straight from “quantify value” to “justify investment.” (In fact, a value calculator plus an ROI calculator is what we most commonly deliver for our clients.)

What’s your biggest selling/marketing challenge, and what tools are you using to overcome it? Share your thoughts in the comments section. 

Upping Your “Pre-Sales” Game with Value Insight Content

Bruce Scheer, President of FutureSight talks about how to master the front end of the prospect buying cycle…the part that doesn’t involve sales. A key strategy is to engage prospects with what he calls, “Value Insight Content.”

Here are a few Value Insight Content examples you can view in thinking about how you might up your own game in sharing value insight with your online prospects:

Best Practices Assessment Example

TCO Campaign Example

Business Value Calculator Example

Business Value Profile Example

Business Value Success Story Example

What are some interesting online value insight assets you have seen/been a part of producing that you can share with this group?

Discussion with a Sales Leader: The Transformation of the SunGard Sales Force

Last week I spoke with Ken Powell, who’s been leading a sales transformation at SunGard in his role as VP of Global Sales Enablement. (He was also a speaker this week at the Sales 2.0 Conference in Boston.)

He joined SunGard just 15 months ago, but his prior experience leading a sales transformation in his previous role at ADP helped him hit the ground running. Already he’s taken many steps to improve sales effectiveness. These have included:

  • equipping the sales team with mobile devices (specifically, Windows 8 tablets, which have “exceeded” his expectations and are “more business friendly” than the iPad);
  • adopting various Sales 2.0 applications (including Xactly, OneSource, LinkedIn, and SAVO, to name just a few);
  • simplifying messaging.

As a company, SunGard is in an interesting spot right now. Formed originally through acquisitions starting in the 1980’s, its primary revenue driver is currently software licensing, although they also have a large consulting organization. Ken said one of their aims is to make the consulting aspect a competitive differentiator.

To that end, Ken has already done quite a bit of work with his team to refine the message his teams send to the market. Whether his salespeople are face-to-face with customers or interacting online, Ken has made it clear that they must connect the capabilities of SunGard solutions and capabilities to business outcomes. Given this initiative, it didn’t surprise me to learn that one of the next steps for Ken and his team is to incorporate value-based selling tools (and TCO tools in particular) into the selling process. In his words, proof of value is “a natural course of a conversation that professional salespeople need to have today when they’re interacting with customers, because it’s an expectation.”

Since I’m in the business of creating ROI tools, Ken asked what I tell clients about overcoming the fairly typical objection from customers about “fictitious numbers.” As we all know, numbers can be arranged in ways that will support almost any kind of story (as Mark Twain said “There are three types of lies:  lies, damned lies, and statistics.”) As a result, many customers look at numbers supplied by salespeople with a very skeptical eye.

I said that, in my mind, a major benefit of using a value calculator (or other tools) as part of the sales process is transparency. Whenever we train salespeople on how to leverage ROI tools, we advocate what we call a “peel-the-onion” approach. Salespeople should rely on the default calculations of an ROI tool to generate an initial report. But the next step shouldn’t be to simply throw the report over the fence and let the customer evaluate it alone. A much more effective route is to say, “We have this tool to evaluate your business case and decide whether or not this solution makes sense for you. Let’s sit down to discuss the numbers together.” After that, you answer questions and adjust numbers accordingly as you go.

With a peel-the-onion strategy, the customer sees the numbers evolve and thus becomes invested in the final calculation. For example, you might change the default analysis from three years to five years on the spot. Or, if the customer pushes back on a point, you have options. If the customer says, “Ok, I’ve seen your case study and how you’ve done this with other customers, but I personally don’t think you’ll ever get a two percent reduction in labor for us.” At that point you can ask the customer what he or she feels is realistic. If it’s one percent, you plug in the numbers for a one percent reduction in labor and show them what that scenario looks like.

The point is to start the conversation with numbers. Numbers will get the customer engaged. Only then can you talk about features and functions and how you’ll be able to support those numbers with your capabilities.

Great sales leaders must make hundreds of choices that will influence whether or not their sales teams succeed. This is particularly true for sales leaders that undertake a sales transformation, which by definition involves countless changes that all tie back to a unifying business strategy. It’s an interesting journey for any sales leader and I look forward to seeing what evolves at SunGard.

Do you have a sales process that supports a business case? What do you say when customers show skepticism about numbers? Share your thoughts in the comments.

Why Selling Will Never Be the Same: Thoughts from a Sales Leader at Hewlett Packard

Recently I had an interesting conversation with Kevin Purcell, Americas Director, Storage Business Unit, at Hewlett Packard about selling and the state of the economy.

Historically when the economy is struggling, companies start cutting budgets and spending less. Also, spending approval moves higher up the food chain; suddenly your director-level contact no longer has the authority to sign off on new purchases. This obviously makes it tough for sellers and marketers to succeed.

Conversely, boom times are typically accompanied by deep pockets, big spending, and less scrutiny of purchasing decisions.

Personally, I think those characteristics of boom times are never coming back. It’s not that I think the economy won’t get stronger. I just think we’ve passed a point in business where you can get away with making a sale without a strong business case to prove the financial need to invest in your solution.

Kevin, who spoke with me in advance of his upcoming presentation at the Sales 2.0 Conference in Boston, had a similar view. During a thriving economy, sales “could get away without an ROI-based business case,” but those days are over; even if the economy gets much stronger, sales teams will still need a way to prove their ROI to the customer.

As Kevin told me, he used to sell to the Telecommunications Industry for one of the “Big 5″ (back when there were 5) Consulting firms, which followed a Solutions Selling process. In that environment, a strong business case was considered crucial to winning deals. Value remains a top priority for him to this day. As a sales leader, he’s made it a point to train his team to understand business problems/issues and financials.

Here are some other intriguing takeaways from our conversation.

  •   He agrees that most deals are lost to “no decision” because sales lacked a business case.
  •   HP has a tool that was developed internally by a support team. The tool does an assessment at an installed base account by examining maintenance, TCO, savings, and cost of doing nothing. Each assessment results in a three-page discussion document to use with a customer.
  •   His focus is to help existing installed base customers realize how to drive costs out of their business(s) by acquiring newer IT Solutions and Technology. These savings can come from maintenance of the existing equipment and/or the increased performance of the new technology.
  •   The easier that you make a tool for the sales team to use, the better.

HP has thousands of salespeople in the Americas Region alone. Over the past six months, they’ve placed a heavier focus on installed-base accounts and they’re continuing to see rising success in Global, SLED, SMB and Commercial markets. Kevin said he’s directed his team to engage with HP’s financing arm as soon as possible and work with the customer to determine whether the business case should be built around purchasing or leasing. I think this early intervention to drive toward economic value for the customer is a key factor contributing to success.

As he pointed out, the economy is still recovering, and every deal is still challenged. There’s a vital need to have executive sponsorship internally to focus on up-selling existing customers, and to fully engage channel partners. His advice was to focus on the customer’s priorities and match proposed offerings to the customer’s business needs (operating cost reductions, revenue growth through differentiation, etc.).

All in all, it was a great discussion with an impressive sales leader. Kevin has held numerous executive roles at HP over the last seven years and clearly has a lot of wisdom to share. I’m looking forward to hearing his presentation, “Sales Leadership Tales from the Field,” on July 15 in Boston.

Do you agree that selling will require a case for ROI from now on — no matter what state the economy is in? Share your thoughts in the comments section.

Musings about QR Codes and Marketing ROI

Sometimes it seems like we never stop talking about ROI here at Stratavant, but that isn’t necessarily the case. Recently, for example, we had a brief brainstorming meeting to discuss what kind of marketing materials we want to feature at our sponsorship booth at the upcoming Sales 2.0 Conference in Boston.

Ultimately one thing we decided to do is add a QR code to our business cards that links to our new ROI-Selling Value Assessment tool. We figured this would be a great blend of an old-school approach (think traditional, paper-based booth materials) and a new-school approach (think digitized content and inbound marketing).

For most folks, the meeting would have ended there. But David and I are hardwired to get to the bottom of things, whether its client’s problems or personal curiosities, and we quickly became distracted by the mathematical possibilities of QR codes. Neither one of us could resist doing a little digging to learn more. After comparing notes, we can share the following facts.

  1. There are 45 standard alphanumeric characters and a typical QR Code has 50 spaces in a string of alphanumeric characters and the highest resolution and quality QR Code can store up to 4,296 characters.
  2. The average URL has nowhere near this many characters (which means QR codes are well suited for storing this type of information).
  1. Excel cannot handle an attempt to calculate 45 (number of standard alphanumeric characters) to the 4,296th power (maximum number of alphanumeric characters stored in a version 40L QR code) though my old HP Engineering Calculator could no doubt handle it. However, I traded that in a while ago for a HP Business Calculator since it is better equipped to handle the time value of money calculations I use every day now.
  1. Even if there were only 1,000 bits of data in a QR code (which there are 4,296 Bytes of data, so suffice it to say many times more than that), then there are more than 1.2 X 10300 (or a novemnonagintillion) combinations (which is the equivalent of more than 1.2 quadrillion to the 20th power – or 1.2 quadrillion times 1 quadrillion twenty times, which is even more than the US Government can spend at this point).

As you can imagine, we spend a lot of time thinking about numbers. In fact, we spend time doing mathematical analysis whenever we build an ROI tool for a client. Although the back end work is complicated, the tool itself is simple and easy to use for both marketers and salespeople as they move their prospects through the sales cycle. Our mantra is that simple is better – as long as the analysis has integrity.

We’re not sure where we are in the trend cycle of QR codes (it seems that they’ve already been declared dead and resurrected by B2C and B2B marketers), but we look forward to sharing our new business cards in Boston with Sales 2.0 Conference attendees.

Does your marketing team use QR codes, and have you seen ROI? Share your thoughts and stories in the comments section.