When Demos Sabotage the Sale

sales demo

Demos are a fundamental part of the sales process. Not only are they a great way to engage prospects, they frequently open the door to a deeper conversation about how you can collaborate to solve the prospect’s most pressing business challenges.

That said, the demo can definitely sabotage sales — particularly for anyone selling complex offerings with long sales cycles. Specifically, the number one mistake I see is showing the demo too early in the buying cycle. Sometimes it’s the sales professional who pushes too soon for a demo. Other times, the prospect asks to see the demo, and the salesperson takes the request as a good sign and leaps at the request. Based on my experience, however, you always want to pace yourself when it comes to the demo. Here are two reasons why.

1) You might not be dealing with a decision maker.

Generally, decision-makers tend to care less about demos and more about how you can solve a business problem. In many cases (particularly in the software world), the person who wants to see the demo is the person who will actually be using your offering. If that’s the case, they’re just curious to see how it works and whether they like it.

2) You become trapped by objections about features or superficial aspects of your offering.

When prospects watch demos, you want them to be in the right frame of mind. Show them a demo too early, and they’re highly likely to focus on the aspects of your offering that they don’t like or perceive as imperfections. This is how you get caught in a web of such silly objections as, “This tool won’t work for us because that button is green and our standard is blue.”

Before you do the demo, you want to be sure you’ve laid the proper groundwork for a collaborative mindset. That means waiting until prospects are 1) aware of their business problem and how much it’s costing them and 2) are committed to solving that business problem. At this stage, they’re much more likely to focus on why your tool is a compelling solution to help them solve their challenges.

One metric I favor looking at is the demo-to-close ratio. The desired value varies quite a bit by industry but you can always measure it against other salespeople in your organization. I’d bet that top performers have lower ratios. Salespeople who throw demos around like candy at a parade are wasting their time and maybe even turning prospects off.

So, when is the right time to show a demo? Obviously it depends a bit on the nature of your solution and the sophistication of the buyer. For complex sales, I generally say that anyone who asks for a demo is likely not a decision maker and should be treated accordingly. The right time to show a demo is when you know you’re talking with someone who is interested in business outcomes rather than the features of your offering. If that’s not the case, use the right questions (for example, “Who will be involved in the decision to move forward with this? Can we set up a meeting with the team?”) to bump the conversation up the decision food chain.

What are your thoughts on the right time to show a prospect your demo? Share your thoughts in the comments section.

Related Posts

Why Having an ROI Calculator Is Good for Sales

Five Reasons Hosted ROI Calculators Trump Excel Spreadsheets

The Value Lifecycle: Justifying the Cost of Your Offering

Related Stratavant Pages

Avoid Low Close Rates

Learn More about ROI Tools

Sales Enablement Solutions

[Image via Flickr / ykanazawa1999]

Three Tips to Drive Urgency Among B2B Decision Makers

Sometimes the way you talk about a customer’s problem can make all the difference. In our experience, there are lots of ways to encourage prospects to think about their business problems with renewed urgency. The next time you want to light a fire under your prospect, try one of the following conversational approaches.

Tip #1: Highlight the “cost-to-delay.”

The cost-to-delay is how much your prospect is losing per month (or week or year) by not investing in your solution. It’s an easy number to calculate (simply divide the value your solution delivers per year by 12) and can make a huge impact during a sales conversation. The minute you say, “Not doing anything about this problem that our solution solves is costing you $25,000 a month,” the prospect typically starts to think about the situation with new urgency.

value calculator ROI cost to delay

Tip #2: Show the payback period.

Calculating the project’s payback period (the amount of time usually expressed in months before the incoming cash flows from the project exceed the project’s costs) can lower your buyer’s perception of risk. Many buyers often ascribe a shorter payback period with the thought that less can go wrong in the short term. You can use this to your advantage by telling your prospects, for example, “If we start now, you’ll already be ahead three months from now.”

Tip #3: Focus on where you have the biggest impact.

Sometimes you can have more influence with prospects if you focus on only the biggest value drivers in your conversations.

This came to light with one of our clients, Nuance, which offers scanning and printing solutions. One thing we discovered was that the biggest value driver for them is labor savings — using Nuance solutions, companies no longer have to spend as much money on having employees deal with managing paper documents. Nuance was aware that this was one of their value points, but they were weighting this equally with other value points (for example, the savings in paper and print cartridges) in their messaging. By focusing the conversation to pinpoint labor savings (which is a much larger savings in their case), they help prospects understand their solution’s value right away. You can learn more about the Nuance story here.

When deals stall it’s often because the buyer lacks the financial justification for your solution. Using the three tips above can get you back on track to quickly close the deal by proving the buyer with business case necessary to obtain internal budget approval. The next time you face a deal that is seemingly going nowhere try out this approach and let me know your results.

To learn more about how value calculators can increase urgency and drive buyers through the sales cycle faster, visit https://tools.estimatebusinessvalue.com/stratavant/ValueCalculator/Home/Home.

How to Credibly Show Revenue Gains in your Business Case

Believe

One thing that B2B sellers and marketers always have to contend with is buyer skepticism around proof points — and especially promised revenue gains.

I have previously written on how to handle indirect benefits in a business case (and tips on how to address one specific category, labor savings, is discussed here). But what about sales growth?

Specificity is the key to overcoming a customer’s natural skepticism in this area. If you say you’ll increase sales by one percent, that doesn’t really mean anything to the customer. They might be thinking to themselves, “Yeah, I’ve heard that one before.” By contrast, if you say you can take two weeks off their sales cycle that starts to bring your value proposition into focus and ward off objections. Customers will be more receptive to hearing about removing barriers to closing deals or increasing the number or quality of leads than just about generic promises of revenue increases.

How We Talk about Revenue with Clients

When we talk with customers, we focus on four specific aspects of how ROI-selling can impact revenue instead of talking about generic top line revenue gains.

One, ROI selling increases the number of leads and the quality of leads. Here’s how it works. First, we work with our clients to create a value calculator. Then, the client makes the value calculator available on their website. When prospects visit our client’s website, they can use the value calculator to evaluate whether our client’s offering delivers enough value to be interesting. However, to download the report, prospects must first fill out a registration form, which then goes to our client as a lead. That results in not only more leads for our client but leads that are typically assigned higher lead scores because they have spent the time to evaluate the value of the offering.

Two, ROI selling improves close ratios. Obviously when leads are better qualified, close ratios will also improve. Also, because the tool itself provides a cost justification for purchase, using our tool helps increase the probability that the project will be approved during an internal evaluation. This will also impact close ratios positively.

Three, ROI selling shortens the sales cycle. An ROI tool helps take the legwork out of building business cases via spreadsheets. Less time on preparing a business case means a shorter sales cycle. And the business case compels prospects to make a faster buying decision, especially when you include such metrics as “cost to delay per month” (which we will talk more about in an upcoming post).

Four, ROI selling increases the average selling price of an offering. Value calculators, ROI tools, and the like quantify for buyers the value they can receive from a solution. In turn, this reduces pricing pressure because buyers already believe they are getting a good deal. It can also enable you to quantify the value of add-ons and options, thereby increasing the selling price even further.

Only when the specific impact on the buying process is established can you credibly show how your offering will increase sales revenue. The conversation then turns to, “What impact on sales would more and better qualified leads have? What if your close ratio was higher and your sales cycle shorter?”

One final point on revenue growth. Be prepared for the prospect to still push back and discount the impact of revenue gains. Lots of things need to happen to achieve revenue growth and typically the company is already engaged in many activities designed to increase revenue. It is OK to show the total potential revenue increase, but you need to allow the prospect to discount the net result to ensure that both they and the project approvers will believe it. Since revenue gains will usually have the largest impact of any type of benefit, even discounting it by 50% or more will still likely result in significant value.

It is fine to show top line growth using case studies from your other customers as part of the discussion, but I believe you’ll get better traction if you tie those proof points to the process changes that drove that revenue growth (shortened sales cycles, better leads, etc.). That is the best way to justify the cost of your solution and show the customer the level of value your offering can deliver.

Does your offering enable revenue gains for your customers? If so, how have you been able to convince prospects of the revenue gains? 

[Image: Flickr / Spike55151]

Dealing With the Dreaded “No-Decision”

Nearly everyone in sales and marketing is familiar with the moment in the sales cycle when a deal stalls out due to customer inertia — otherwise known as the dreaded “no decision.”

In fact this phenomenon is so common that it is a main focus of the CSO Insights research report, “Proper Prioritization: Optimizing Revenue in 2013.” In the report, CSO Insights managing partners Jim Dickie and Barry Trailer relay a number of interesting findings related to “no decision.” For purposes of the study, only forecasted deals — not pipeline deals — were taken into account. The first finding is that sales teams close only about 46 percent of their forecasted deals. Among deals that were lost, 26 percent were attributed to “no decision.”

Clearly, something is wrong in the world of selling when deals are not lost to competitors but to the customer’s decision to not make a purchase. While this seems bleak, I would actually argue that the “no decision” described In the CSO Insights study is a step up from the passive “no decision” where the customer doesn’t choose to not move forward, but instead never makes a decision.  In the words of Rush, “If you choose not to decide, you still have made a choice.”  This often occurs when the customer cannot financially justify the solution and just keeps asking for more information.

Even so, losing 26 percent of deals to “no decision” is nothing to celebrate. However, as the CSO Insights report mentions, when you know you’re losing deals to customer inertia, you can formulate a plan to mitigate that impact on you. One of the solutions is better segmentation and data analysis to determine which among your prospects are most likely to lead to closed deals, and simply prioritize those opportunities over all others.

In the end, losing a deal is frustrating. But the reason you lost the sale is informative and can be used to build a framework for future success.  Even more important though is learning to walk away from deals that will get stuck in the passive “no decision” cycle.

What’s the biggest reason you lose forecasted deals? Is “no decision” a major problem for your company? How do you get past a “no-decision” scenario?  Share your thoughts in the comments section.

Overcoming Objections in a Complex Sales Cycle

Learning how to overcome objections is an essential selling skill. It also takes time and experience. This is particularly true for sales teams with a long and complex sales cycle.

With that in mind, here are links to four of our most popular blog posts related to overcoming different kinds of customer objections during a complex sales cycle.

Make labor savings believable with customers

Prevent objections in the first place

Persuading the CFO

What to do customer asks for a revised report/business case

What’s the biggest objection you hear from customers, and what is your response? 

Three Qualities That Will Win a Buyer’s Business

Why does one sales team win a customer’s business, while another sales team finishes in second place? According to research announced in this blog post, New Sales Research: What Sales Winners Do Differently, three simple selling behaviors separate winning sales teams from their competition.

The findings of the study, published by RAIN Group, are based on an analysis of more than 700 B2B purchases from buyers representing $3.1 billion in annual purchases. Let’s look at the top three factors that buyers attributed to sales teams that won the buyer’s business:

  1. Educated me with new ideas or perspectives,
  2. Collaborated with me,
  3. Persuaded me we would achieve results.

Now let’s look at these same factors and see how buyers ranked second-place finishers in their ability to demonstrate these attributes:

  1. Educated me with new ideas or perspectives – 42nd place (dead last),
  2. Collaborated with me – 26th place,
  3. Persuaded me we would achieve results – 41st place.

Obviously the second-place sales teams were not trying to lose the deals on purpose. I think the likely problem is their failure to adapt to changing buyer behavior. For the second-place teams, unless they recognize what has changed (see the top three factors above), their only chance for success is if the winner is not in the deal and they are only competing against the third-and fourth-place vendors.

What I found encouraging was the behavior of sales winners. The three main verbs from their success factors (educate, collaborate, and persuade) are the building blocks of the approach that I advocate (aka, ROI-based selling). The keys are for salespeople to help prospects:

  1. Better see the magnitude of their problems,
  2. More clearly imagine how things could be better,
  3. Work with them to project measurable results, and
  4. Deliver a business case to overcome internal objections.

There are different types of tools that can help salespeople accomplish each of these four points and communicate value at different stages of the sales cycle. Regardless which tool you use, the fundamental approach remains the same: educate, collaborate, persuade. By shifting their focus to what buyers really want, I believe that second-place finishers can become sales winners.

Do you use tools that help you educate, collaborate, and persuade buyers? Do you agree these are key selling behaviors to win with buyers today? Share your thoughts in the comments section.

Thoughts on Summer Slowdowns for B2B Sellers and Marketers

For some B2B sellers and marketers, the summer slump is just a myth. But no matter what the season, all of us experience a slowdown every now and again. Here are some smart tips we’ve come across on the subject of beating a sales or marketing slowdown (summertime or otherwise) in the B2B space.

“Companies [can] try a variety of creative programs to try to light a fire and get things moving. ON24 uses a three-month contest called the VAULT. Every time reps sell a deal of a certain size, or the Lead Gen team sets a meeting within a target account, they earn a code for the VAULT.  At the end of August, four codes will open a vault and earn an incredible prize: Rolex, Macbook with iPod, big screen with surround sound, etc.” Read more at http://www.yesware.com/blog/2013/07/15/will-summer-heat-roast-your-sales-teams-productivity/

“Give your salespeople spontaneous days off when they’ve earned them. Even if you do this only on very rare occasions, it’s a gesture that packs a big wallop.  If your team is really being productive let them know it.  Unexpected 4 day weekends can pay huge dividends.” Read more at http://blog.saleskatz.com/bid/273819/Avoiding-Summer-Sales-Slowdown 

“There’s actually a lot that can be accomplished during slow periods, especially when it comes to your content marketing strategy … Connect with some rockstars … if there’s someone in a related industry who’s rocking their content marketing — maybe they have a great newsletter, maybe they have great videos or podcasts — this is a great time to touch base with them and say, ‘Hey, would you mind spending 30 minutes on the phone? I would love to get your ideas and see if I can benefit from your wisdom.’ I find most people are very, very open to things like that.” Listen to the podcast (skip to 7:00 minute mark to hear the 10 tips.)

“Summer usually slow? Prospect twice as much late spring. Winter slow? Prospect three times as much as usual in late Fall. It might take two or three times as much, during a slow season, to reach the same amount of prospects but by preparing in advance you can still set appointments and close business.” Read more at http://thesalesjournal.net/sales-blog/featured-contributors/47-beating-a-seasonal-slump

“Use summer to work with beta testers – take this off time to dig deeper to find out what your customers want in your product.” Read more at http://www.business2community.com/salesmanagement/how-to-deal-with-summer-sales-slow-down-0557321#JdzZ0Av6UpezHd8I.99

Do you have a slow season? How do you avoid the slump? Share your thoughts in the comments section.