“If you can’t explain it simply, you don’t understand it well enough.” — Albert Einstein
As I ponder that quote, I wonder how many marketing messages and sales conversations lack simple explanation. I bet it’s more than I can guess (and right now I’m guessing a number ending in lots of zeroes). And without that simple explanation, prospects quickly become disinterested.
I don’t think the reason for prospects’ lack of understanding is that marketers and salespeople are stupid. I believe it’s because they don’t understand how customers use their offering and realize value. Here is an example from a blog post I wrote last year. Nuance, one of my clients and a leading document management software provider, was focusing its messaging on savings from reduced paper and ink consumption. However, we soon discovered that labor savings (as a result of employees dealing with fewer paper documents) was an even bigger value driver. Knowing this, we could then roll out the positioning and tools that resonated with prospects.
In another project that I’m currently working on with a provider of managed services, the client’s roughly translated messaging is that “you can save time and money” — with no real explanation behind it. And this despite the fact that their solution can deliver millions of dollars of cost savings and incremental revenue. We’re now working with them to identify their discrete benefits that buyers will care about.
You can improve your understanding of how prospects view your solution by thinking about your offering in two distinct ways:
- Cost Savings: How does my offering help customers save money?
- Revenue Gains: How does my offering help customers grow revenue?
There is a third special case but we will get to that in a moment.
This is not, “I’ll cut my price by 2% and save you $20,000.” No, no, no! What you want to do is to think how your solution lowers your customer’s expenses. Common areas to look at are COGS/Cost of Sales and SG&A expenses.
For example, does your offering:
- Improve throughput?
- Reduce headcount (or avoid hiring additional workers)?
- Eliminate legacy systems?
- Lower direct material consumption?
- Reduce scrap rates?
Again, from your customer’s perspective, how does your offering improve their top line? Top line growth can only happen four ways:
- Higher customer retention
- Better customer acquisition
- Greater wallet share, including cross-sell and upsell
- Higher selling price
For example, does your offering:
- Improve customer service?
- Enable faster market expansion?
- Reduce online store downtime?
- Produce a competitive advantage for your customer’s product?
- Generate more leads?
Total Cost of Ownership – The Special Case
The framework above is useful for showing prospects the need to change. However, when a prospect decides to move away from the status quo, you might find yourself in a competitive selling situation. In this case, you need to show the benefits of your offering vis-à-vis your competitor. Differences in the cost savings and revenue gains that your customer can expect from each solution should be included in the business case, but you also need to dig deeper. For example, relatively speaking does your offering:
- Need fewer hours to maintain?
- Require less installation costs?
- Use fewer consumables?
- Have a smaller footprint?
- Consume less energy?
Here’s another way to think about it. Ceteris paribus, wouldn’t you put the brand of motor oil in your car that lasts 20% longer?
Remember what Einstein said?
After you go through the benefit-identification framework to understand what matters to your customer and how much it matters, you can provide prospects with a simple explanation of your offering. I bet that will cut through your prospects’ stupor and get them to act.
What steps do you take to make sure customers understand the value of your offering? Share your thoughts in the comments section.
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[Image via Flickr / Fahad Khalil]