What Einstein Exposed About B2B Marketing and Sales

Einstein b2b sales and marketing

“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.

Benefit-Identification Framework

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.

Cost Savings

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?

Revenue Gains

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. 

Related Posts

An End to Cost Based Pricing?

The Value Lifecycle: Justifying the Cost of Your Offering

Related Stratavant Pages

Avoid Low Close Rates

Learn More about ROI Tools

See an Example ROI Tool

[Image via Flickr / Fahad Khalil]

3 Steps to Take Control of the Sale

By Doyle Slayton

control sales

Do you ever feel like you’re losing control of the conversation during a prospecting call or sales appointment? You quickly realize you better regain control of the sale, or you’re going to lose the deal.

Some prospects engage you with a multitude of questions around product features. Can your software do this… can it do that? At first, you think, “Wow” this customer is really interested! Thirty minutes later you realize… wait a minute… we’re nowhere close to getting this deal.

Here is a technique you can master to regain control of the conversation. I call it the Statement, Benefit, Probe technique.

Statement – This is simply your next statement in the course of a conversation, or your response to a question. (Transition quickly to apply the “benefit” step.)

Benefit – Build on your “Statement” with specific reasons why you’re recommending this solution to solve the problem… or share examples of ways this solution has helped other clients. (Make it quick… two to three sentences… and immediately follow with the “probe.”)

Probe – Ask a question where the prospect can verbalize their own reasons for how your product is going to help them achieve their goal. Just like that… you are back in control.

Putting it into practice:

Let’s pick a scenario… You’re working with a client who is interested in new strategies to improve sales prospecting. Their salespeople can’t seem to get enough new opportunities into the pipeline.

Your conversation with the prospect is running off track, and it’s time to regain control of the appointment. Choose your direction based on your value proposition for this specific client. In this case, you need to build value around demand generation, lead conversion, and building a sales pipeline. The client says, “We need our salespeople win new business instead of just managing current accounts. How can you help us do that?”

Statement

“In this case, we’d focus on the first two phases of our customer lifecycle management model. The first is Lead Generation and Conversion, the second is Sales Prospecting and Follow Up.”

Benefit

“The thing our clients appreciate most, is that our strategies don’t just benefit one department. We create alignment between Marketing and Sales with consistent brand messaging throughout the sales cycle, and that’s the tipping point… demand generation improves, conversion rates go up, and you start to see more new business in the sales pipeline.”

Probe

“If we help you develop this type of sales and marketing strategy, how do you see things playing out when we introduce these ideas to your team?” (Stay quiet, listen intently, and respond with either a follow up question or you next Statement, Benefit, Probe)

This technique might not come easy at first. You’ve got to be quick on your feet and make sure the client doesn’t feel like you are cutting them off. With practice, it becomes instinctive. You’ll learn to recognize when it’s time to reel the prospect in and regain control of the sale.

This post appeared originally here on the xoombi blog and is used with permission. 

Doyle Slayton xoombi
Doyle Slayton is an internationally-recognized sales and leadership strategist, speaker, and blogger. He is co-founder of xoombi, a sales acceleration company with the breakthrough software and methodology that aligns marketing, sales, and sales operations. Xoombi helps create elite performance teams that generate high conversion leads and close more new business. 

[Image via Flickr / Faramarz Hashemi]

What’s Your Level of B2B Marketing Expertise?

expert

After 15 years of working with B2B marketers, I’ve found the most expert ones understand how to formulate and communicate the value of their offering, and then deliver on it. These levels of expertise are evident in four stages of the B2B marketing cycle: two in the pre-sale phase and two in the post-sale phase. Here’s a closer look at each stage, including tips on how you can improve in each one.

Stage One (Pre-Sale): Appeal to the Buyer’s Bottom Line
All B2B marketers are responsible for speaking a language that will attract buyers. However, many marketers make the mistake of thinking about their value proposition in terms of features, functions, and benefits — and that’s not how business decision makers think.

Think about how your offering will impact your customer’s ability to save money or grow revenue. Ask yourself, “What are the direct revenue enhancing, cost reducing, and strategic business benefits associated with our offering?” Providing your customers with a business value framework is an excellent way to capture business decision makers’ attention and interest.

Stage Two (Pre-Sale): Help Sales Show ROI
Good marketers empower the sales team in a variety of ways. If you want to become a valuable asset to sales, help them find ways to measure and illustrate the buyer’s return on investment (ROI) in purchasing your solution. The ability to show ROI reduces the amount of time the buyer takes to make a decision, and can also help the buyer get budget approval to purchase your offering.

Stage Three (Post-Sale): Explore Opportunities to Improve
Part of your value proposition is providing customers with support and insight to help them achieve business results after they sign on the dotted line. Great marketers work with customers to measure the business impact you’ve forecasted, identify where value isn’t being captured, and take corrective action. This can be an incredible way to build customer loyalty and drive associated services and follow-on sales opportunities.

Stage Four (Post-Sale): Create Shared Value
At this stage, your company has entered into shared risk, reward, and gain sharing arrangements with the customer. Most marketers ultimately want to do business at this level when they are confident of the value being delivered to their customers, and want to maximize the amount of money earned from any client.

Inherently every offering has a value proposition. It’s just a matter of how well you define your value proposition and how effectively you can convey your value to customers. If your sales are suffering, it could be due to an ineffective or poorly articulated value proposition.

Are you not getting enough qualified leads? Suffering from poor buyer awareness? Click here to see our solutions to these common marketing problems and more.

[Image: Flickr / Derek Dysart]

Three Ways Marketing Can Help Sales Get More Appointments

By Doyle Slayton

sales and marketing collaboration

The most difficult part of a salesperson’s job is finding interested prospects and getting the appointment.

The solution is in creating prospecting alignment between marketing and sales. We need to be more strategic about our prospecting list. Stop calling everybody and start focusing on real prospects.

Executing on the strategy can appear complicated, highly variable, and overwhelming at first, but teamwork between marketing and sales determines its success.

Here’s a list of 3 ways marketing can help sales get more appointments.

1) Market Research

How many times has a sales manager walked up to a struggling sales rep and asked, “Hey, how are things going today?” and the salesperson responds, “Just doing a little research…”

Of course sales has to do “some research” on individual accounts to figure our why a prospect might be interested… review their personal profilecompany website, market trends, and business intelligence to learn about current initiatives, etc., but it can’t be an all day, or worse, an all week kind of thing. Every minute your sales team spends on research is less time spent on selling.

Great marketing teams take the lead on research and then collaborate with sales on tactical decisions to define a process for identifying and satisfying customer needs. They target buyer personas and common industry challenges to maximize potential opportunities. Next, sales and marketing build a unified messaging program that aligns demand generation with sales prospecting activities.

2) Demand Generation

The first step to building awareness is to determine what questions your customers are asking and look for creative ways to provide answers. Focus around core topics that will intrigue, challenge, and inspire your readers. Be innovative and passionate about covering topics and trends that influence your industry, and share your ideas through a variety of channels and formats.

The best content doesn’t focus “directly” on what your company’s products and services do. Instead, it shares ideas and strategies for solving real business problems. When people like the way your company thinks, they’ll want to do business with you.

3) Follow-Up Strategy

It’s easy for salespeople to get into rut when working the phones, “Hi David, I’m just calling to see where you are in the decision making process…” as a common example.

Develop a collaborative follow-up strategy between marketing and sales. Share the campaign schedule with your sales team and develop a follow up strategy with core messaging sales should use to follow up via phone and email. Provide articles, white papers, case studies, videos, etc. that build upon your core topics and align with the current campaign.

You can change the game by providing the sales rep with value added content that allows them to say, “Hi Karen, the last time we spoke you talked about the overwhelming challenge of executing on new initiatives, I’m sending you a list of seven questions that will help you activate alignment between marketing, sales, and sales operations. I think you’ll find it helpful.”

Track engagement throughout each campaign. Observe which prospects are opening your emails, visiting your website, and engaging on social sites. Sales can take these insights and craft targeted reasons for why the prospect would want to schedule time to meet.

This post appeared originally here on the xoombi blog and is used with permission. 

Doyle Slayton xoombi
Doyle Slayton is an internationally-recognized sales and leadership strategist, speaker, and blogger. He is co-founder of xoombi, a sales acceleration company with the breakthrough software and methodology that aligns marketing, sales, and sales operations. Xoombi helps create elite performance teams that generate high conversion leads and close more new business. 

[Image: Flickr / Yahoo]

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]

Why Value Based Selling Is So Successful

by Jim Heffernan

light bulbs

Value-based sales is a popular term that gets thrown around an awful lot these days. Many major companies claim to provide this service to their customers while citing different reasons for why their particular organization has the best value. From tech support to delivery speed, from warranty policies to company reputability, there are many factors that a company will claim makes them a “value-based seller.” 

What is Value Selling? 

If you go online and search for the keywords “value based sales” or “value selling,” you will be practically bombarded with articles about how the process works or what value selling really means. For example, Sequeira Consulting’s website defines value based selling as an approach “built on quantifying the impact the service makes on the customer’s financial performance,” a definition mostly suited for business to business (B2B) transactions because it points out the mutual benefits to both the service provider and the client in financial terms. In an article for SalesResources.com, Dave Kahle defined the “value” in value selling as something “defined by the customer, not the supplier,” a definition more in line with the traditional “the customer is always right” mode of thought prevalent in the customer service industry.

In truth, value selling is all of the above and more. In both of the above examples, the emphasis is on what would best serve the needs or wants of the customer, not the price of the service given. Even though a B2B transaction is usually negotiated with both sides looking squarely at the return on investment (ROI), that ROI consideration is only a part of the value being sold to the customer. When a salesperson uses value selling techniques to identify the needs of the customer and highlight how those needs are met by the product being sold, the customer becomes more invested in acquiring that product. When a customer is invested in acquiring a product, that customer is much less likely to allow the transaction negotiation to become stuck or fall through. This applies equally to both B2B and private consumer transactions.

How to Make Value-Based Sales Work for You 

By refocusing the discussion between buyer and seller from price to value, the seller can mitigate the risk of lengthy, time-consuming debates and haggling sessions over the cost of the product and keep the buyer from attempting to discount the product to a price which makes it virtually unprofitable.

Using a simple example, a new start-up business is moving into an office and needs to buy light bulbs in bulk because the office was supplied with defective bulbs that burned out within a month. The sales representative of the bulk light bulb company offers the customer high-quality bulbs that are both long-lasting and energy efficient, but it would cost $500 for enough bulbs to fill the office and the buyer only budgeted for $350. If the seller were to drop the price, the light bulb company would barely make enough profit to justify the sale. Cheaper bulbs would burn out too quickly, and the buyer is now wary of “bargain” brand pricing because of the defective product from earlier.

Here is where value-based sales techniques can really shine. The sales rep, knowing that the customer wants the better-quality bulb, can establish the long-term value to the buyer. Even though the initial price of the bulbs is just a little above the customer’s assumed budget the seller can stress the long-term benefits of the high-efficiency bulbs. In this instance, the sales rep would inform the customer about the value of not having to replace the bulbs for up to four times as long as the standard product, thus curtailing the need to continuously budget $350 per year just for new lights, or even mention that the high-efficiency bulbs use half the kilowatt hours of their lower-price counterparts, reducing monthly energy costs. By helping the customer understand the measurable value the product will deliver to his business, the customer will feel less compelled to haggle.

The reason value-based selling works is because it takes into account the needs and wants of the customer to create an approach that best influences the customer’s purchase decision. If a sales rep can create in the customer the impression that the product being sold is indispensable to his or her needs and that the value of the transaction more than justifies the price, that is value-based selling.

Value-based selling engages customers and creates a buying situation where the customer is less focused on price and more anxious to start realizing the benefits This allows sellers to successfully close transactions more often with better profit margins and saves time that can then be dedicated to more customers.

Identifying and addressing a customer’s needs with a product and guiding the customer into recognizing the value of that product is the way in which such involvement builds a healthy, stable relationship between buyer and seller. Buyers who simply receive a product that is cheap without being made aware of the value that they are receiving from the seller will quickly switch to another supplier if they find a cheaper source of the product. Why? Because, without the sense of investment in a product that is supplied by a value-based sales approach, the customer is only focused on the cost of obtaining the product and not the value of what they are getting.

However, when a customer has been invested in the seller’s product through a discussion of the value that is being given, they will consider more than just the price of a competitor product before making a decision to abandon their current supplier. If the seller can keep the customer convinced that their product is a better value overall, they are able to keep the customer’s business without having to sacrifice profits by dropping the cost of the product.

In Conclusion 

Ultimately, value-based selling is successful because it provides customers with the understanding that they are making worthwhile investments of their money. Good value-based sales techniques are tailored to the needs of the customer, making them understand why they are buying a quality product for the asking price. Value selling resolves potential customer issues with pricing and prevents the stalling of important deals and the wasting of precious employee man-hours. The rewards for masterfully exploiting value-based sales techniques are well worth the investment for any company with a product to value.

Jim Heffernan

Jim Heffernan is Sales Performance Consultant at Miller Heiman and President of Insights53. This post appeared originally on the Insights53 blog and is published here with permission. 

 

[Image via Flickr / kennymatic]

Why Having an ROI Calculator Is Good for Sales

I truly believe in the power of ROI tools and value calculators to help generate better, more qualified leads for B2B marketers and enhance a B2B salesperson’s ability to close a deal. (If I didn’t, I wouldn’t be in the business of selling them.)

So when I read Jean-Marc Bellot’s blog post, “Why You Should Get Rid of Your ROI Calculator,” last month on LinkedIn, I felt compelled to put together a response.

Here is a summary of his points:

  1. Putting an ROI tool on your website assumes that all customers are identical.
  2. Having an ROI tool on your website provides your prospects with the justification to buy from your competitors.
  3. Encouraging your salespeople to use your ROI calculator encourages them to make “really stupid statements.”
  4. Reducing the concept of value creation to a calculator decreases the customers buying experience and castrates sales.
  5. For a customer, ROI calculation is not an event, but a process.

Let’s examine these points one by one.

Point 1: Putting an ROI tool on your website assumes that all customers are identical.

It’s true that no two customers are alike. The thing is, good ROI calculators actually account for that fact.

A good value/ROI calculator is built to help a prospect decide if a given solution is a sound economic investment. That means the tool incorporates industry and benchmark data; but it also allows the prospect to modify any data inputs or assumptions to make the calculation reflect the economic realities that drive his or her business.

Takeaway: Look for an ROI tool that provides the ability to modify the inputs, not one with hidden assumptions and blind calculations of value.

Point 2: Having an ROI tool on your website provides your prospects with the justification to buy from your competitors.

So, prospects are using your ROI calculator to research pricing and then they end up buying from your competitors? If this is the case, I’m not sure your ROI tool is the problem.

When you think about market definitions, you’ve got two ends of the spectrum to consider. On one end, you have sales teams that sell absolute commodities. In this environment, competitors all deliver the same amount of value. In that case, the lowest-cost competitor should always win. Any company that invests in an ROI calculator on their website to help prospects evaluate their purchase decision in a commoditized market is wasting money. (After all, you don’t need a calculator to tell you which company offers the lowest price.)

On the other end of the spectrum, you have companies that provide differentiated offerings that deliver more value relative to the competition. In that case, the value calculator or ROI tool only emphasizes why the prospect should buy from you. (Unless you do not, in fact, offer the value you think you do.)

Takeaway: If your offering delivers value differently than your competition, a value calculator on your web site is one of the best ways to communicate that value, generate buyer interest, and capture leads.

Point 3: Encouraging your salespeople to use your ROI calculator provides them with an incentive to make “really stupid statements.”

No respectable tool incentivizes salespeople to make stupid statements.

That’s because a well-built value calculator or ROI tool doesn’t make any absolute or fixed assumptions about the value that will be delivered. Instead, it provides the salesperson with a tool to have a discussion with the customer about the problems that they are having and how their solution could

  1. solve those problems,
  2. provide value to their business, and
  3. justify the investment in the proposed solution.

We’ve written before on our blog about how some sales teams put the focus on the wrong benefit with certain customers (for example, serving up “labor savings” as a benefit to companies that, for a variety of reasons, really aren’t interested in labor savings). Salespeople definitely need a basic level of business acumen to understand these kinds of trade-offs that customers make. However, they should not be expected to become financial experts.

Takeaway: If your ROI tool causes the salesperson to make a “stupid statement,” then it isn’t an effective tool and should be updated.

Point four: Reducing the concept of “value creation” to a calculator decreases the customers buying experience and castrates sales.

Customers are now in the mode of conducting the majority of their buying process online before ever talking to a salesperson. Consider these statistics.

  • A CEB study of more than 1,400 B2B customers across industries revealed that 57% of a typical purchase decision is made before a customer even talks to a supplier.
  • Sirius Decisions research indicates that 67% of B2B buyers begin their purchasing journey online.
  • Other B2B sales and marketing experts have put this figure as high as 92%.

The bottom line is, if you aren’t providing tools to help a customer learn more about you and what you can offer, you are likely being eliminated before they even talk to you. It is hard for me to imagine a better way to castrate sales then to not allow them to talk to over 50% of prospective buyers.

Takeaway: Any tool you can put online to help prospects make their buying decision — especially if it helps them to understand why they should purchase your offering — is a good thing.

Point five: For a customer, ROI calculation is not an event, but a process.

That’s true. Many companies treat the business case analysis (or ROI analysis) as a one-time event, but every business decision should be evaluated continually. Once you make the investment in a solution, however, the cost of that initial investment becomes sunk cost and is no longer relevant in the ongoing analysis of the investment.  However, vendors can use ROI tools at renewal time to justify the ongoing investment in their solution.

Takeaway: Every company should continually evaluate the performance of its investments and ROI tools can aid in that ongoing evaluation.

What’s your take on the value of ROI calculators in your marketing and sales process? Please share your thoughts in the comments section.