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.

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Five Reasons Hosted ROI Calculators Trump Excel Spreadsheets

The Value Lifecycle: Justifying the Cost of Your Offering

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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]

Remove “ity” Words from Your B2B Value Proposition

By Jeff Bennett and Darrin Fleming

value messaging b2b marketing

When building relationships with buyers, it’s important to choose your words carefully. We’re not just referring to small talk or the language of negotiation. We’re talking about the specific words you use to describe your offering and what differentiates it.

A lot of sellers and marketers make the mistake of using what we call “ity” words when attempting to convey the value of their offering. For example:

  • Reliability
  • Quality
  • Durability
  • Flexibility
  • Elasticity
  • Viscosity

We’re not down on these words in general. In fact, depending on who you’re talking to, they can be important descriptors. Although the words above might describe your offering, the problem is that they fail to convey the value of your offering.

For example, let’s say your product increases elasticity by five percent. That’s a fine statement for your messaging. It describes to engineers and technical experts what your product actually does. But it means almost nothing to the people in charge of giving up a budget to purchase your product. Unless you can describe exactly how that five percent increase in elasticity will advance your customer’s business, you’re not going to make the sale based on that statement alone.

The other problem with “ity” words is that they’re relative. Context is everything. For example, some would say that Energizer batteries have a high degree of reliability. But the assumption is that you’ll use that Energizer battery in a toy. If you tried to use it in a space shuttle, would you still be able to say the product is highly reliable?

“Ity” words can also be so vague as to become meaningless. For example, for years, Ford’s slogan was “Quality is Job 1.” But what does that mean? Say you’re in India manufacturing cars, and you call them “high quality” because they last for three years, and that conforms to consumer needs and expectations. If you want to expand to a U.S. market, the claim that you make the “highest quality” cars in India suddenly means something very different, because American consumers have a different expectation about the length of time a car should last.

Similarly, a person buying a Porsche isn’t looking for the same definition of quality as a person buying a four-door sedan. In those cases, quality means different things to different consumers. To translate product features into value, be specific. For example, does quality mean “lasts longer,” “uses the most advanced technologies,” or “requires fewer trips to the service garage”? (For more insight on this topic read “How Does Quality Relate to Value?”.)

Most words that end in “ity” are either so vague or so relative that they fail to usefully convey your value to customers. It’s essential to convey to the customer how your product will impact his or her financial statement. Adjectives might describe your product accurately, but for the purposes of your value proposition, you need to push beyond “ity” words. When you come across these words, ask “why?” several times to understand how this adjective conveys to the customer how your offering will impact his or her business.

Again, we wouldn’t advise removing “ity” words from your messaging, because if you make a material with a high viscosity, that’s something the customer should know. Just remember that you need to be able to push past features and benefits when talking to buyers (and particularly financial buyers) if you want to close the sale.

What adjectives do you use to describe your product when talking to customers? Share your thoughts in the comments section.

[Image: Flickr / Martha Soukup]

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]

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. 

Engaging B2B Customers Online

Years ago many B2B companies would never have dreamed that they’d be using the Web to capture and engage with customers at the earliest stages of the sales cycle. Vendors’ websites were thought of as a place for prospects to affirm what they learned from sales. However, the reality for sales and marketing today is much different. As a CEB study has revealed, 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.

I made the video below in response to the fact that many customers today actively avoid seeking out sales professionals to learn about products and solutions. Instead, customers are searching the Web to learn more about solutions that can solve their problems and get educated about topics that affect their business. Here are the steps I recommend that B2B vendors take to engage with buyers online:

1)     Include information on your site that is unique and relevant to your prospective customers.

2)     Offer engaging content such as videos, blogs, polls, calculators and assessments.

3)     Include a call to action that clearly articulates the next step forward.

I invite you to watch this short video to learn more and share your feedback with me in the comments section.