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]

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.

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? 

Upping Your “Pre-Sales” Game with Value Insight Content

Bruce Scheer, President of FutureSight talks about how to master the front end of the prospect buying cycle…the part that doesn’t involve sales. A key strategy is to engage prospects with what he calls, “Value Insight Content.”

Here are a few Value Insight Content examples you can view in thinking about how you might up your own game in sharing value insight with your online prospects:

Best Practices Assessment Example

TCO Campaign Example

Business Value Calculator Example

Business Value Profile Example

Business Value Success Story Example

What are some interesting online value insight assets you have seen/been a part of producing that you can share with this group?

Discussion with a Sales Leader: The Transformation of the SunGard Sales Force

Last week I spoke with Ken Powell, who’s been leading a sales transformation at SunGard in his role as VP of Global Sales Enablement. (He was also a speaker this week at the Sales 2.0 Conference in Boston.)

He joined SunGard just 15 months ago, but his prior experience leading a sales transformation in his previous role at ADP helped him hit the ground running. Already he’s taken many steps to improve sales effectiveness. These have included:

  • equipping the sales team with mobile devices (specifically, Windows 8 tablets, which have “exceeded” his expectations and are “more business friendly” than the iPad);
  • adopting various Sales 2.0 applications (including Xactly, OneSource, LinkedIn, and SAVO, to name just a few);
  • simplifying messaging.

As a company, SunGard is in an interesting spot right now. Formed originally through acquisitions starting in the 1980’s, its primary revenue driver is currently software licensing, although they also have a large consulting organization. Ken said one of their aims is to make the consulting aspect a competitive differentiator.

To that end, Ken has already done quite a bit of work with his team to refine the message his teams send to the market. Whether his salespeople are face-to-face with customers or interacting online, Ken has made it clear that they must connect the capabilities of SunGard solutions and capabilities to business outcomes. Given this initiative, it didn’t surprise me to learn that one of the next steps for Ken and his team is to incorporate value-based selling tools (and TCO tools in particular) into the selling process. In his words, proof of value is “a natural course of a conversation that professional salespeople need to have today when they’re interacting with customers, because it’s an expectation.”

Since I’m in the business of creating ROI tools, Ken asked what I tell clients about overcoming the fairly typical objection from customers about “fictitious numbers.” As we all know, numbers can be arranged in ways that will support almost any kind of story (as Mark Twain said “There are three types of lies:  lies, damned lies, and statistics.”) As a result, many customers look at numbers supplied by salespeople with a very skeptical eye.

I said that, in my mind, a major benefit of using a value calculator (or other tools) as part of the sales process is transparency. Whenever we train salespeople on how to leverage ROI tools, we advocate what we call a “peel-the-onion” approach. Salespeople should rely on the default calculations of an ROI tool to generate an initial report. But the next step shouldn’t be to simply throw the report over the fence and let the customer evaluate it alone. A much more effective route is to say, “We have this tool to evaluate your business case and decide whether or not this solution makes sense for you. Let’s sit down to discuss the numbers together.” After that, you answer questions and adjust numbers accordingly as you go.

With a peel-the-onion strategy, the customer sees the numbers evolve and thus becomes invested in the final calculation. For example, you might change the default analysis from three years to five years on the spot. Or, if the customer pushes back on a point, you have options. If the customer says, “Ok, I’ve seen your case study and how you’ve done this with other customers, but I personally don’t think you’ll ever get a two percent reduction in labor for us.” At that point you can ask the customer what he or she feels is realistic. If it’s one percent, you plug in the numbers for a one percent reduction in labor and show them what that scenario looks like.

The point is to start the conversation with numbers. Numbers will get the customer engaged. Only then can you talk about features and functions and how you’ll be able to support those numbers with your capabilities.

Great sales leaders must make hundreds of choices that will influence whether or not their sales teams succeed. This is particularly true for sales leaders that undertake a sales transformation, which by definition involves countless changes that all tie back to a unifying business strategy. It’s an interesting journey for any sales leader and I look forward to seeing what evolves at SunGard.

Do you have a sales process that supports a business case? What do you say when customers show skepticism about numbers? Share your thoughts in the comments.

3 Tools to Communicate Value at Different Stages of the Sales Cycle

Depending on where the prospect is in the buying process (or your sales cycle), there are different tools (or calculators) to help you with your value-based selling approach.

business people with chartsIn the earliest stages of the sales cycle, you want to establish the prospect’s pain and how much that problem is costing them. This will help set you up for a conversation about how much your offering can help. A value calculator helps you show how much money the prospect is leaving on the table each month, or how much they’re spending that’s unnecessary. This helps you establish the “value” of solving the problem. (Here’s a good example of a value calculator.)

The main reason you want to use the value calculator early in the process is that it helps you avoid a price discussion until you’ve clearly defined what the prospect’s problem is and how your offering can add value. This is why a value calculator can be a great lead-generation tool for marketing. If you add it to your website or make it a landing page in an email campaign, prospects can use it in a self-serve way to estimate how much the problem is actually costing them and how much they might be able to reduce costs or increase sales. Again, this tool doesn’t address pricing or how much you might be charging them.

As you get later into the sales process, there are two types of tools you can use to communicate value. One tool is great for when you’re in a competitive situation and you’re trying to differentiate: a TCO (Total Cost of Ownership) calculator. This tool can help you make a case for why you’ll be better able than the competition to create value for the prospect.

The other type of tool to use later in the sales process is an ROI tool, which helps you make a case that the prospect should invest in your offering (as opposed to why you provide better value than the competition as in a TCO calculator). An ROI tool provides the prospect with the financial justification for your solution. In other words, it will show how much they’ll save, the payback period (aka, the break-even point from investing in your offering), and cost-to-delay-per-month (how much they’re losing each month by not investing in your offering). These metrics really help when the CEO or CFO gets involved and wants to see a cost justification for investing in your offering.

The type of tool you use depends on what information you want to reveal, and when. Unless your pricing is publicly available, you would rarely make an ROI tool available until the sales cycle is well underway. Here’s why. You could scare the prospect off early by indicating how much your offering might cost them, let’s say one million dollars for discussion purposes, because they won’t stick around long enough to hear about how your offering can save them ten million dollars.

It’s important to note that the ROI calculator is not used to set your price but to justify your price. (There are tools to help you with price-setting, like PROS, LeveragePoint, Vendavo, or Zilliant.) Most selling processes will tell you to resist talking about price until you’ve gotten the prospect to realize, “Yes, this is a big problem and it’s costing us X amount of money.” This is where a value calculator is a great tool to help establish the cost of the problem.  Be careful trying to use an ROI tool to establish your pricing because if a prospect believes you’re going through an assessment simply to set the maximum price possible, then they might give you artificially low numbers in an effort to minimize the amount they might spend on your offering. This can create distrust on both sides, which is never a good way to start a business relationship.

When used at the right place in the sales cycle, all three of these tools, the value calculator, TCO calculator and ROI calculator, can establish a strong business relationship with your prospect.

At what stages of the sales cycle do you discuss value? Share your thoughts in the comments section.