Helping Prospects Visualize the Need for Change: The Halogen Story

Sometimes the earliest stage in the buying process isn’t when a prospect realizes he or she has a problem. It’s a nagging feeling they have about the status quo. Even though things are going well, they still feel they could somehow be better.

This is an opportunity for sellers and marketers. Your job is to paint a vision of what “better” looks like (including, hopefully, the idea that your product or solution can help them get there).

One of my clients, Halogen Software, decided to help its target market of HR managers identify ways they could improve their succession-planning strategies. The challenge for Halogen’s typical prospect is: how can we identify, develop, and retain a talented workforce? Halogen’s succession planning software solves this problem by easily allowing users to:

  1. Understand their workforce’s potential
  2. Develop internal talent pools,
  3. Recruit successors from within.

We worked with Halogen to create a succession planning assessment tool that would give prospects an idea of their status quo, and show them areas for possible improvement.

The tool essentially asks prospects “How does your succession planning strategy stack up?” by taking users through a 20 question self-assessment. Each question elicits rankings, ranging from “Not at All” to “Very Well.” The tool then provides a score to show users how well their organization is doing in succession planning (scores appear in four areas: identification, assessment, development, and management). Users can download a report that features their scores, plus tailored recommendations for improvement based on best practices extrapolated from Rothwell & Associates research.

Use an assessment tool to help prospects visualize the need for change

When prospects understand their shortcomings, they respond more urgently to invitations to try new solutions and find new ways to improve. Because Halogen offers this assessment tool on its web site, the company paves the way to have more effective conversations with prospects that now have an idea about how they can go from good to better.

What’s your biggest challenge in getting prospects to engage with you? Do you use assessment tools to paint a vision of success? Share your thoughts in the comments section.

The Hidden Cost of Office Printing and Scanning: The Nuance Story

Content marketing is an integral piece of today’s B2B marketing approach. However, pushing out content just to prove you have a content marketing strategy rarely generates meaningful results. To be meaningful, you have to help buyers realize why they should work with you. One of my clients, Nuance, does this by showing prospects how much the status quo is costing them.

Background

Nuance’s document workflow and automation tools deliver measurable productivity and reduce costs by streamlining how people create, share, store, and use office documents. However, many prospects in Nuance’s target vertical markets such as legal, finance, government, construction, education, and insurance are unaware of their true cost of lost productivity and unnecessary expenditures.

Hidden Costs

Gartner’s study, “Why You Should Manage Your Office Printing,” called office printing “an unexploited savings opportunity” and pointed out that companies can reduce office printing spending by 10% to 30% “through active management.”

Even if you don’t happen to be an expert in print-and-document management, which I’m sure most readers aren’t, it’s not difficult to imagine benefits such as:

  • Less time wasted by employees,
  • Better optimized printer fleet,
  • Less maintenance,
  • Decrease in help-desk calls,
  • Reduced consumption of supplies.

We decided that if we could help Nuance communicate these opportunities, then Nuance’s value would be more tangible and real to prospects.

Value-Based Positioning

Our approach was to create a value calculator that provides prospects with a cost breakdown and savings summary of using Nuance’s print management and document scanning and conversion solutions. Users can enter their own data or use the pre-populated data to estimate cost savings in categories. These would include, for example:

  • IT labor,
  • Office worker labor,
  • Office supplies,
  • Document storage,
  • Hardware.

Once buyers realize how much they can save — and where the savings come from — Nuance sales reps can have a useful dialog with prospects about value. Another benefit is that prospective buyers can generate a business case to support the need for Nuance’s solutions. This is also a point made in the Gartner study, and one we at Stratavant have articulated for years: a great antidote to buyer inaction is to give buyers the economic reason to make a change. Armed with a compelling business case, buyers can justify the value of your solution and help them realize why they should work with you.

Stratavant tools can be used to quantify the value of your solution and capture more leads. How do you communicate the value your solution? Leave your thoughts in the comments section or email me at dsvigel@stratavant.com.

How to Communicate Value to Customers: The IQS Story

One thing that will make or break your sales is your ability to help buyers understand the value you can provide to them. In some cases, as with a client of mine, IQS, that means communicating the ways in which the prospect or customer is losing money.

Situation

IQS has a 25-year history of providing manufacturers with quality and compliance management solutions, which are components of a Manufacturing Execution System (MES). The company has a strong foundation in various target markets, including automotive. We’ve been working with them for the last 10 years and have helped them to identify some of the key ways that their solution delivers value to their customers.

Cost of the Problem

Given that IQS’ solution focuses on solving  quality issues, we had to first understand the cost of the problem.   In its study, “Closed Loop Quality Management,” Aberdeen found that 7% of production did not meet specifications for a typical manufacturer.  We then dug into how off-spec product would impact a company’s financials:

  1. Lost sales revenue
  2. Increased cost of goods sold
  3. Increased cost of selling

So, if a typical manufacturing company was seeing these profitability impacts on 7% of their production, we were confident that a quality management solution could make a significant bottom line contribution.   We then determined that the cost of poor quality impacts manufacturers in these specific ways:

  • the need to carry extra inventory,
  • higher equipment downtime,
  • greater scrap and disposal costs,
  • extra shipping and expediting costs,
  • higher warranty costs,
  • and an increase in product returns and the labor cost required to rework off-spec material.

The following diagram shows these impacts.

IQS margin impact2

Value Delivered by the Solution

We then focused on how IQS could reduce that cost of poor quality.  By reducing errors during the manufacturing process, IQS is able to reduce almost all of these factors.  Also, IQS provides traceability into what happened during the manufacture of a particular product so if a problem is identified in the future, it can be traced back to the root cause and corrected very quickly.

Stratavant worked with IQS to build a value calculator that can be used to estimate the value that their solution can deliver to a prospective customer. The calculator quantifies the value that the IQS solution delivers in the following categories:

  • Reduced Direct Material Cost
  • Reduced Scrap Material Cost
  • Reduced Production Labor Cost
  • Reduced Inspection Labor Cost
  • Reduced Non-Production Labor Cost
  • Reduced Maintenance Cost
  • Reduced Warranty, Recalls, and Returns
  • Increased Sales Revenue

This tool has helped both IQS and prospective customers estimate and understand how much financial impact the IQS Quality and Compliance Management solutions can have on their organization. This helps IQS to build the business case for their offerings.

With any customer, you always want to first identify what the cost of the problem is. It’s important to quantify the problem in terms of numbers. How much is this costing the company? That’s the basis for developing a winning value proposition.

Stratavant tools can be used to quantify the value of your solution.  How do you quantify the business case for your solution? Leave your thoughts in the comments section or email me at dfleming@stratavant.com

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.