What Discounting Costing You?

Discounting is unfortunately a way of life for many of our sales professionals today. 

There is a new breed of buyer who is more skeptical and frugal than ever before, indicating that price is the key factor in over 64% of decisions (U of Dayton). As well, these buyers are now firmly in control of the purchase cycle, inviting sales later than ever, when the process is already 65% complete (Forrester).

The engagement for many sales professionals doesn’t start at the crucial opportunity discovery or needs analysis phase. Instead, the engagement occurs when the “bake-off” is in full swing. As a result of the late invite and competitiveness of this stage, our sales professionals are often forced to discount as the only way to win the business.

Unfortunately, this has a high cost. Take a typical $500M software company. Discounting of a typical 10% per deal can add up, costing this organization $50M per year in lost sales.

What if you could reduce the number of deals where discounting was needed, and improve deal size overall?

For our $500M example, this would result in:

·         Reduce discounting by 10% = $4M

·         Reduce discounting by 30% = $12M

Accomplishing the reduction in discounting is a two pronged approach, enabling sales with:

·         Provocative content and tools, enabling them to engage earlier in the sales process by moving beyond the typical product / solution sales pitch, to provide compelling and challenging insight to prospects. This includes addressing key questions the buyer has early, especially:

o   Why Change? – quantifying for the prospect that there is a significant cost of doing nothing, and that the status quo is not an option

o   Why Now? – diagnosing and prioritizing the issues for the prospect, especially recommending the right solution and quantifying the value, significant ROI and fast payback.

·         Proactive tools to move the discussion beyond price, to focus on total cost of ownership (TCO) and quantifiable value advantages of the proposed solution. This enables the sales professional to address “Why Your Solution?” without the answer having to rely on discounting.

To learn more about the cost of discounting and recommended best practices, click here:

http://www.alinean.com/content_optimization

What is a Lengthening Sales Cycle Costing You?

For many B2B firms, sales cycles have extended by a month or more over the past few years, and show little signs of shortening. The economic malaise continues to drive buyers to be more skeptical, risk adverse and frugal, causing a rapid increase in stalled deals, and understandable delays in the decision making process.

These sales cycle delays have had a serious impact on B2B sales revenue and growth, resulting in the failure of many sales and marketing organizations to meet growth goals and quotas.

As a result of stalled sales and lengthening sales cycles, hundreds of millions in new sales has been lost, yet most organizations are unaware of the real cost of these sales cycle delays.

For a typical $500M software company, the average cost per each month of extended sales cycles is $41.66M ($500M /12).

What if you could accelerate the sales cycle on just a fraction of your deals…..and reduce these elongated cycles?

For our $500M company example, the value of reducing sales cycles:

·         By 1 month = $41.66M,

·         By 2 months = $83.33M.

Of course reducing the sales cycle is easier said than done … but there are some ways to assure that sales cycles don’t extend any longer, and best practices to begin chipping away at the issue. After all, the cost of doing nothing is just too high.

Facilitating the Buyer’s Journey
Throughout the buyer’s journey, prospects have to navigate a complex change management process, answer key questions about the opportunity, and justify their decisions to an increasing number of stakeholders involved in the decision making process. From discovery, to consideration, through to decision, the buyer’s journey is not a simple one.

Developing the right content and tools could help facilitate the buyer’s decision making process, helping to overcome the chasm’s in their decision making process – can help to streamline decisions and reduce the sales cycle.

The key  is to have the right, interactive provocative / value-focused content, to convince your buyer as to:

·         “Why Change?”, proving that there is a substantial cost-of-doing-nothing and that the status quo just won't do.

·         “Why Now?”, that your proposal represents significant incremental value, substantial ROI and fast payback, especially compared to all other proposed projects.

·        “Why Your Solution?”, proving that your solution represents superior value, lower cost of ownership than competitive alternatives.

Click here to learn more: http://www.alinean.com/content_optimization

Are we all Investing in the Wrong Content?

We all know the importance of content marketing, but some recent research would indicate that the spending is not aligned with effectiveness, and that "yes", we are investing too much in the wrong content:

• Up to 60% of deals are not lost to the competition, but to the status quo - more risk adverse and frugal buyers choosing to do nothing, rather than change (SBI)
• 65% of deals go to the solution provider that helps uncover the issue and establishes the business need as a priority, versus 35% that goes to those that win the bake-off (Forrester)

However, when we examine content marketing and sales enablement investments, more than 70% of the spending is currently aimed at the later, competitive shoot-out stages of the decision cycle,  versus addressing the more important earlier stages, where the buyer needs to be convinced as to "Why Change?" and "Why Now?".

Perhaps this is why Content Marketing Institute continues to report that >50% of content marketing programs are perceived as “less than effective”?

Some key questions you may want to ask yourself in light of this new research:

·         Do you see the same challenges, too many non-starters / deals lost to no-decision?

·         Similar issues in your spending alignment, investing too much in later phases and not enough to motivate the prospect as to “Why Change?” and “Why Now?”?

What is the Value of a Lead?

It seems like it’s harder than ever to get your prospects interested, and turn them into real opportunities.

The issue is that your prospects have clearly changed, today more:

1.       In Control – leveraging more information sources than ever, especially the Internet, social media and collaboration groups, your prospects dictate when and how they want to be engaged, and when they do, are armed with a wealth of knowledge about potential opportunities, your solution and the competition.

2.       Overloaded – forced to do more with less, your prospects have less time than ever to engage with solution providers, yet at the same time, are inundated with dozens of vendor phone calls and emails each day.

3.       Skeptical – your prospect has heard it all before, so the same old product / solution pitches won’t work.

4.       Frugal – more risk adverse and with less budget, your prospect is more apt to “Do Nothing, than to say “Yes”.  Unfortunately, it takes a lot today to convince your prospect to part with precious funds and take the risk on your new proposal. They especially won’t say yes unless they see a quantified “cost of doing nothing” and know the project will have significant tangible benefits, significant ROI and fast payback.

Frugalnomics is in full effect, and as a result, marketing is harder than ever before, requiring more significant investments in more content, more channels and more collaboration.

As well, your buyers have changed, so you’ll need new content that is more personalized, provocative, and value-focused, to fuel their need for control, break through the overload, connect one on one, and address the economic focus.

Is it Worth It? The Value of a Lead
The new content and tools are likely to require an investment on your part, to develop the new content and interactive tools to meet new buyer expectations. So how do you justify the incremental investment it’s going to take to drive these new programs?

Calculations can get complicated because marketing is often a non-linear process, with multiple touches and influences ultimately driving and opportunity and sale.

However, we aren’t looking for the absolute contribution, just a conservative method to determine if the value of each lead the marketing program generates, so we can be sure it will be worth investing in, and a so we can begin assigning some value to the program once its up and running.

Although a simple approach, we’ll use Incremental Sales Revenue as the basic metric to estimate the value of the program:

Number of Leads Generated By a Campaign * Lead to Sales Conversion Rate * Average Deal Size = Incremental Sales Revenue

Two key figures drive the justification:

·         Lead to Sales Conversion Rate

·         Average Deal Size

These two metrics vary dramatically between companies, but using some industry average figures, let’s run through an example of a campaign that is estimated to generate 200 new leads per month:

·         Number of Incremental Leads Per Month Estimated From the Program= 200

·         Avg. Conversion Rate of Leads to Sales = 1.0%

·         Avg. Deal Size = $50,000 (will vary by prospect)

Applied in the formula, this results in:

·         Incremental Sales Revenue per Month = 200 * 1.0% * $50,000 = $100,000 / month

·         Incremental Sales Revenue per Year = $100,000 * 12 months = $1.4M

·         Avg. revenue per lead = $583 / lead

To calculate the net value of the campaign and lead to the business, it is important to not count the gross value, the sales revenue, but to adjust the sales revenue for the cost of this revenue. To do this, we use incremental margin, factoring in the cost of goods sold / cost of services for the deal sold, and any incremental sales, general and administrative overhead expenses for the margin. Using a 25% margin figure:

·         Avg margin per lead (at 25% margin) = $145 / lead

So what do your numbers tell you about the value per lead? Worth more or less than this example?

If you said the same or more, this would not be a bad program for you to invest in, especially if the campaign is more effective at connecting and engaging with today’s more challenging prospect, and moreover, if it can guarantee the number of leads. This would mean close to 200% ROI.

We have such a program for you, fueled by Alinean’s Interactive White Papers, which can be personalized for each of your prospects, to better attract, connect and engage - and with a guaranteed ROI.

Click here to learn more: http://www.alinean.com/value_marketing/interactive_white_papers

What is the Do Nothing Buyer Costing You?

Up to 60% of deals in sales pipelines are currently not being lost to the competition, but are being lost to the status quo – the do nothing buyer. This malaise is costing millions in lost sales, and represents the single greatest opportunity for driving your 2012 sales and marketing success.

As we have been reporting for some time, the Great Recession has led to a fundamental and permanent change in B2B buyers, who are more overloaded, skeptical and frugal than ever before – Frugalnomics is in full effect. As a result, many buyers are forced to do-more-with-less, and are more risk adverse. These buyers are more apt to stick with their current state than change, even though they know their legacy solutions are not ideal.

If they are like the majority, your buyers are unduly assigning extreme cost and risk to any proposed changes, so your prospect needs to be convinced as to the overwhelming, quantifiable reasons to consider new solutions, or they will simply do nothing. As a result, up to 60% of your sales pipeline is currently frozen in place, content on sticking with the status quo rather than change.

What is the Do Nothing buyer currently costing your organization? The numbers may surprise you.

Consider a typical $500M revenue software company. The estimated pipeline for this firm is typically 1.3x annual sales, or $650M. With 60% of the pipeline stalled at status quo, some $390M of sales are stalled in status quo. Breaking the status quo represents the potential to boost sales 78%, the single greatest opportunity to drive incremental sales.

What if you could convince your buyer as to:

·         “Why Change?”, proving that there is a substantial cost-of-doing-nothing,

·         “Why Now?”, that your proposal represents significant incremental value, especially compared to all other proposed projects.

Implementing provocative sales and marketing tools, to answer “Why Change?” and “Why Now?”, has been proven to break the status quo. With these tools to help you advance just a small percentage of stalled deals from Do Nothing to Yes, you could reap you millions in additional sales revenue.

Currently, most sales and marketing efforts have focused more of the messaging, tools and training to win the competitive bake-off phase of the buying decision. Shifting just a small percentage of the investments to the earlier part of the buyer’s journey, answering the “Why Change?” and “Why Now?” questions for the buyer via provocative sales and marketing tools, represents your greatest opportunity for success.

For a $500M software company, making such provocative sales and marketing tool investments can help address a substantial part of the stalled deals. Drive just five percent of the deals from Do Nothing to Yes can yield almost $20M in incremental sales revenue, while advancing 1 in 10, could yield $40M in incremental sales.

Some key numbers you can examine today, to size what addressing the status quo could mean for you:

1.       What percentage of your current deals are currently lost to the status quo?

2.       What is the sales revenue impact of the status quo?

3.       What could provocative sales and marketing tools mean to break the status quo and drive incremental sales?

Click here to learn more about the status quo busting opportunity, and provocative sales and marketing tools:

 http://www.alinean.com/content_optimization

Can we host the Alinean developed sales / marketing tool?

Just like several very successful sales and marketing applications, especially salesforce.com, cloud services is our business delivery model.

Like salesforce.com or other cloud service providers, they don't let you host because, having the provider host often delivers faster time to market, allows you to focus on your core competencies / applications, often delivers superior service,  and in almost all instances, provides lower total cost of ownership (TCO) compared to premise-based solutions. 

For Alinean, the cloud service delivery model provides:

1) a rich on-line / database driven enterprise application, Alinean XcelLive, that would be difficult to manage host on your own - Some of the features include fast tool development, lower cost maintenance, rich customer intelligence, superior access and data security, integrated administration and reporting, and integration with CRM and marketing automation systems. Additional features can be found here: http://www.alinean.com/XcelLive

2) No integration or IT resources needed to initially get the service / tool setup and delivered

3) No need for ongoing IT or webteam costs to manage and maintain - we do it all for you, providing high SLA commitments, application hosting, bandwidth, monitoring, maintenance and technical support - lower total cost of ownership (TCO).

4) Continuous improvement of the application, providing additional features and services over time

5) Ability to not just deliver one tool, but leveraging the cloud platform to deliver an entire suite of marketing and sales tools to help break the status-quo and drive more opportunities and deals.

New eBook: Product, Solution or Value - You Decide

Joe, Sally and Greg are three sales professionals with a great sales opportunity. See how each one proves their worth, leverages marketing and gets the deal, in this fun and important story.

Product, Solution or Value - You Decide!

Top Blog Posts of 2011

We wrote over 100 articles on Frugalnomics and B2B Selling and Marketing last year. So what was tops in 2011?

Here's the roundup of your favorite articles:

1. Optimize Content Marketing by Facilitating the Buyer’s Journey
2. Who do B2B Buyers Trust?
3. Diametrically Opposed Forces: Selling Value in a Buyer Controlled World
4. Provocation-Based Selling: Loosening the Status-Quo for Sales Success
5. The Big-O: Outcome Selling
6. Are you CIO Worthy?

Predictions 2012 Roundup

The fall of the mighty traditional white paper? The end of sales as we know it?

We have made some bold B2B sales and marketing predictions for 2012, and have rounded them up here so you can be ready:

1. The Economic-Focused Buyer Drives Need for New B2B Sales and Marketing Strategies for 2012
2. How will the Economy Affect the Buyer’s Decision Process in 2012?
3. CFOs are Large and in Charge of Buying Process in 2012
4. Recovery Makes Selling IT Much Easier into 2012? Fahgettaboudit!

Will the Return to Good Times Bring an End to Frugalnomics?

With economic uncertainty still in play, it should come as no surprise that Executives’ top priority remains cutting costs / improving business efficiency versus growth.  The research by the Financial Times and Doremus indicates that the focus on cost savings is significant, and even higher for larger organizations, where frugality ranks twice that of any growth priority.
This got me thinking, not about the current pessimistic economic outlook, but about a potential recovery and what it would mean for B2B sales and marketing strategies. After all, as the European debt crisis resolves, and the US election cycle unfolds, a recovery could indeed be in the cards. This would likely swing the priority from cutting costs back to growing revenue, opening new markets and launching new products. Or will it?

Indeed, as the economic recovery takes hold, innovative companies will be in a great position to potentially lead and catch the next wave, while agile companies will jockey for ways to capture early growth opportunities and execute on growth plans. However, as a result of the Great Recession, technology and several other factors, the world has changed. Even though the recovery will place more emphasis on growth initiatives, we predict that Frugalnomics, where businesses maintain a focus on costs and the bottom-line, will remain in effect.

The impact is that not just in the short term, but for a long time to come, buyers will remain more cost conscience, status-quo biased, price-centric and bottom-line focused. While B2B sales and marketing will face continued pressure to prove the cost of doing nothing, justify the superior ROI and quick payback on investments and quantify competitive value.

So why won’t the return to good times bring an end to Frugalnomics? There are a few reasons that we feel Frugalnomics will be a permanent part of B2B purchase decisions, and a continued sales and marketing challenge for years to come:

·         The world is flat according to Thomas Friedman, and as a result, global competition makes it easier than ever to source quality solutions from lower cost / better providers, regardless of where they might be located worldwide. This continues to evolve the competitive cost structure of different businesses, business models and supply chains. As a result, an organization can no longer rest on current efficiency levels in such a competitive world, and must seek year-over-year to drive out costs and inefficiency. Efficiency is not just a near term requirement to achieve bottom-line performance in the face of revenue challenges, but a permanent challenge to be competitive in an ever flattening world.

·         When trying to improve bottom-line performance, an executive can achieve this two ways, by increasing the top-line revenue, or by cutting costs. However, each dollar of incremental revenue earned is not the same as each dollar in cost savings as to how it contributes to the bottom-line. For every dollar of incremental revenue, there is a cost of good / service as well as variable SG&A that comes into play. So if you grow revenue by one dollar, it has a cost associated with it so is not worth that full amount, but instead the costs and margin needs to be factored. Typically this reduces the bottom-line impact to 30% or less of the incremental revenue. Improving the bottom-line with incremental revenue requires 3 to 5 times more revenue when compared to each dollar of savings / efficiency improvements. This fact alone means that cost savings will always be in vogue.

·         When considering a new proposal that has many different types of benefits, such as revenue and cost savings, stakeholders view these benefits differently. In business case after business case, regardless of the macro-economic environment, we see that hard cost savings are viewed as more tangible and reliable in making the case than revenue focused benefits. Stakeholders want benefits they can count on, and history has shown that tracking and realizing revenue driven benefits is often difficult. As a result, even for revenue focused projects, the value of hard cost savings in any justification proposal outweighs the value of revenue improvements in almost all cases.

·         As organizations are more risk adverse from the Great Recession, Finance has become more involved in procurement, both at the strategic and tactical level. In some organizations this has resulted in CFOs taking over formal control of several business groups including IT, HR, operations, marketing and more. Financial involvement has increased the level of economic diligence and justification on every proposed investment. As the recovery takes hold, Finance will likely remit some control, but is expected to remain more involved formally and informally for years to come. With the majority of financial executives focused on cost savings opportunities in good times and in bad, the cost consciousness, status-quo bias, price-centricity and bottom-line focus are here to stay.

Although a recovery may emphasize growth oriented value propositions vs. cost savings, a more cost-competitive world, the superior bottom-line value of cost savings and increased financial control and oversight means that buyers will remain empowered, skeptical and frugal, and Frugalnomics will remain in effect.

Therefore, it is relevant not just in the short term, but for long term success, that B2B sales and marketing teams develop and leverage provocative, value-focused content and tools. Oriented to help facilitate the buyer’s journey, these tools can be used directly by customers, or in sales-led workshops to help successively:

1.       Diagnose opportunities and illuminate priorities
2.       Overcome the status-quo bias, proving there is a cost of doing nothing
3.       Justify change
4.       Prove competitive value

The facilitation is best done via interactive tools, especially: provocative white papers, benefit estimators, diagnostic assessments, ROI justifications, and TCO competitive comparisons.

The Bottom-Line
A measurable and sustained economic recovery will be a welcome relief down the road, but our predictions are that it will not mean an end to Frugalnomics.

Buyers will still be challenged by worldwide competitive pressures to be more efficient, with permanent risk aversion, and more financial accountability. B2B sales and marketing will remain challenged connect, engage and sell to a more empowered, skeptical and frugal buyer. Imperative in such an environment to fight Frugalnomics by proving to the buyer that there is a tangible cost-of-doing-nothing, and justifying the superior ROI, quick payback and competitive value of proposed solutions.

When the economy changes, vendor proposals will need to evolve to help convince buyers that the proposed solution can help address the strategic need to grow revenue, launch new products and open new markets. But there will be a continued and important need to quantify, for permanently frugal buyers, the expected hard cost savings, efficiency improvements and bottom-line impacts for each and every significant proposal.

Ready for Continued Frugalnomics? Cutting Costs Remains Top Buyer Priority for 2012

For those who thought 2012 might offer some much needed relief, a new survey uncovers Executives’ pessimistic sentiment going into 2012, indicating significant economic concerns and a strong focus on cutting costs and improving efficiency versus driving growth.

This latest survey of over 600 senior executives worldwide, published by Doremus and the Financial Times in December 2011, confirms that Frugalnomics, a business focus on reducing costs and the bottom-line, is increasing for the New Year.

Tracing the percentage of those expecting improvements for the coming year in the global economy, local economy, their industry and for their individual company, Executives reported a significant drop in positive outlook, returning to pessimistic levels similar to those of 2008 and the beginning of the Great Recession.

Respondents indicate that the current negative outlook is driven by persistent low consumer confidence, the European debt crises, potential impact of US debt and unemployment.

As a result of continued uncertainty and negative economic outlooks, nearly half of the respondents indicate that cutting costs and improving efficiency remains their top priority, especially among the largest companies, where cost cutting / efficiency is cited by more than twice as many Executives as are any growth priorities.

If the research is any indication, Executives will struggle with increased Frugalnomic pressures into 2012. More overloaded and risk adverse, Executives will struggle to find the time and stomach to consider new investments. And even when there is a will to make a new investment, there might not be a way, as budget constraints and more financial oversight drive increased justification requirements and higher hurdles.

Frugalnomics Requires New B2B Sales and Marketing Strategies
Over the past several years we have seen the impact of Frugalnomics on B2B sales and marketing, making it more difficult to connect, engage and sell to more overloaded, skeptical and frugal buyers. This has resulted in longer sales cycles, stalled deals, increased discounting and more competitive deals.

These are all serious issues to overcome, and with every challenge there are borne new opportunities, especially for those solution providers that can help fight Frugalnomics. Executives must deliver bottom-line results, and buyers need ideas on how to improve efficiency and drive success. The solution providers that can proactively help buyers diagnose and prioritize opportunities and justify the value of proposed purchases will be the clear winners in 2012.

To succeed, B2B sales and marketing should provide new diagnostic and value-focused content and tools to help facilitate the buyer’s decision making process:

·    Help Overloaded Executives See the Light – most Executives have experienced cutbacks, and have been forced to do-more-with-less.  As a result, there are fewer resources than ever to uncover new opportunities, consider new project proposals and assess purchase options. Proactively and provocatively diagnosing and prioritizing cost saving and other business issues and consultatively recommending the right solution can help make the Executive a cost-savings hero, and help your team get the deal.

·    Break the Status-Quo - With limited funding for new projects, and higher perceived risks due to the economic uncertainty, for many it’s easier to forgo new projects / investments and maintain the current status quo than to commit to a new investment. With the right content and tools however, you can challenge the Executive that there is a “cost of doing nothing”, to outweigh the potential risk of a change and get the buyer to commit to and prioritize the proposed project.

·     Prove Cost Savings – With the focus remaining on how to reduce costs, it’s crucial to show how your solutions can help the frugal buyer further drive savings and improve business efficiency. With financial considerations taking center stage on every purchase, it’s crucial to quantify the bottom-line impact, significant return on investment and fast payback of proposals to economy-focused Executives.

·    Quantify Competitive Value – Today’s Executive remains cost conscious, and wants the lowest price / best value from each dollar spent.  It is imperative to migrate the discussion beyond price and sure discounting demands by proactively proving lower total cost of ownership (TCO) and greater value than competitors.

The Bottom-Line
Economic gloom and doom is back, with Executives entering 2012 almost as pessimistic as they were at the start of the Great Recession in 2008. Low consumer confidence, the European debt crisis and other concerns drive Executives to remain focused on cost-savings versus growth, with Frugalnomics in full-effect.

For B2B solution providers, this means buyers remain challenged, more overloaded, skeptical and frugal than ever before.

Successful B2B sales and marketing, recognize that buyers are uniquely challenged and will deliver new marketing content and sales enablement tools to buyers diagnose and prioritize issues, quantify the cost of doing nothing, justify proposals and prove competitive value.

Implementing specific programs to fight Frugalnomics is essential for B2B solution providers to achieve better connections, engagements and sales performance, despite continued economic and buyer challenges into 2012.


Source: Decision Dynamics Report (Doremus and the Financial Times) –December 2011

Happy New Year! Maybe not for IT Sales & Marketing

The New Year’s cheer didn’t last long for IT, as Gartner was quick to lower its global technology spending forecast, barely a week into 2012. With the financial crisis in Europe dragging on, natural disasters in the Pacific Rim disrupting component supply chains, and a Presidential election cycle  in the US dampening any hope for optimism, Gartner lowered earlier forecasts to 3.7%, down almost a full percentage point from initial 4.6% growth forecasts.

Looking beyond 2012, Gartner also estimates continued headwinds, lowering future forecasts for 2015 downwards to 5% growth from earlier 5.4% predictions.

To put this in perspective, last year  global technology spending grew at 6.9%, making 2011a standout year compared to earlier, and if you believe the forecasts, later years.

For IT executives, budgets will remain constrained, an environment of do-more-with-less. Frugalnomics is in full effect, leaving fewer resources to evaluate new opportunities and the organization risk adverse to change. More control is in the hands of finance, requiring more economic justification on each proposal. Serious budget constraints make even high ROI projects hard to get approved. Addressing the growing backlog, satisfying business needs, and justifying new projects will remain challenging for IT execs.

For IT solution providers, 2012 promises to be a challenging year, with buyers more overloaded, skeptical and frugal than ever before - making it tough to connect and engage to discuss new opportunities, and when engaged, making it more difficult to break the status-quo, justify purchase decisions, and close more competitive deals.

In every challenge though is a great opportunity, whereby the solution providers that can help facilitate this ever more difficult process will have a distinct advantage in 2012 and beyond.

So how can IT solution providers succeed in the face of Frugalnomics? The best way may be for IT solution providers to optimize their marketing content and sales engagement practices to help facilitate the buyer’s journey, working hand-in-hand with today’s more overloaded, skeptical and frugal buyer to break through the status-quo bias to identify and address important opportunities, justify investments and make valuable purchases.

Facilitate the Economy-Focused Buyer’s Journey with Right Content and Tools
The Buyer’s Journey represents a set of steps an organization needs to go through in order to make a purchase. These steps may vary based on the organization’s decision making processes and the type or size of purchase, but typical process steps include three different phases: Discovery, Consideration and Decision.

You can think of the journey as a complex change management process, a set of steps that can be difficult, frustrating and time consuming for the buyer to navigate.

The more facilitation provided by the solution provider to streamline and remove friction from the process, the better. And with the buyer having fewer resources than ever, consultative facilitation becomes crucial to winning deals.

Discovery Phase
In the first part of the buyer’s journey, decision makers need to be convinced that the current way of doing business is not ideal, and that the status-quo should change. Making this more difficult, the buyer must convince not just themselves, but many other stakeholders that the change is beneficial and worthy. And in today’s economy, finance is playing more of a key role in setting strategy and budgets – a risk adverse bunch that will need extra convincing.

With a current do-more-with-less environment, most organizations are doing all they can to keep the lights on, much less consider new projects. In such a stressed environment, buyer’s might be feeling pain, but not have the resources to address, and in many instances are not self-aware of what ails them.  For those that are aware of issues, convincing the multitude of stakeholders in the organization and finance to make the necessary and precious investments can be a challenge.  After all, for most organizations it is easier and less risky to do nothing, than to change from the status quo.

At this critical stage, defining the vision for the project, most buyers are researching options on their own, and not involving sales in the process. However, it is during this early phase that buyer’s indicate establishing strong provider preferences, with Forrester indicating that 65% of vendors who create the buying vision during these early phases of the journey getting the deal. For many solution providers, lack of engagement means a “failure to launch”.

Solution providers can help facilitate the decision making process during Discovery in a number of ways, including:

·         Diagnosing issues – Through self-assessment tools and sales-led workshops, helping illuminate important issues of which the busy buyer might not have been aware, and helping the buyer to confirm that the known pains they are feeling are real and should be a priority to resolve. Helping buyer’s recognize important issues is often done via research and case studies, communicating that others are experiencing similar pains, that these issues should be a priority to resolve, and that solutions exist to meet the challenges. Diagnostic Assessments are even more provocative, surveying the buyer on spending, goals and priorities issues, capability and maturity to understand where they are currently, benchmarking them to best practice leaders and peers to identify and prioritize issues, and prescribing specific solutions to remedy the highest priority opportunities.

·         Quantifying the cost-of-doing-nothing – many organizations won’t change unless they understand that maintaining the status-quo has a cost that greatly exceeds the investment / risks of change, and the cost-of-doing-nothing is high enough to make the project a priority.  Research papers and case studies can be used to help convince buyers that not changing has significant cost, TCO Calculators can be used to quantify the current costs in comparison to costs post change, and Benefit Estimators can be used to quantify the savings and incremental value available, but not being realized.

Consideration Phase
Once a buyer has committed to change and prioritized the project, the decision makers need to research possible solution approaches and create a short-list of specific providers.

Empowered by the Internet and social media, but overloaded, it is difficult for buyers to wade through the copious amounts of research and marketing materials to understand the various advantages and benefits that each solution approach might provide.

Solution providers can help facilitate the Consideration phase, providing content and engagement tools to help:

·         Provide Solution Demos and Trials – spoiled by consumer “try-before-you-buy” options, prove the capabilities of your solution versus others with demos and trials.

·         Deliver Solution Guides and Comparisons – helping customers properly consider various solution considerations, options and competitive differentiators.

·         Quantify the incremental benefits and TCO of various solution options – to help buyers understand the differences amongst various solution approaches, vendors should provide research, case studies and analysis tools to help buyers understand the various competitive options and advantages of different approaches, quantify the total cost of ownership (TCO) differences, and illuminate the incremental benefits of the solution compared to other solution alternatives.

Decision Phase
In the final stage of the buyer’s journey, the procurement team must reach consensus on a particular proposal, and gain selection approval from the many stakeholders involved in the decision making process. Finance in particular has become more involved in economic justification and the final vendor selection process, providing more price pressure and financial diligence.

The final Decision is a best-value bake-off, where Forrester indicates that 35% of vendor selection decisions are made. Even though the earlier phases drive 65% of decisions, many deals get stalled at this phase, with vendors failing to overcome objections and driving consensus, making it vital to effectively address.

To make it easier for stakeholders to grant approval, risk must be mitigated and justified, with the solution provider providing content and engagements to: 

·         Provide financial justification – providing the research, case studies and ROI tools to help quantify the required investment, benefits, ROI, payback and other key metrics that financial executives need to make the case for change.

·         Quantify price / value trade off – delivering comparisons that prove competitive advantages of the selected product / service, especially quantifying the total cost of ownership (TCO) advantages, incremental benefits, and lower risks.

The Bottom-Line
Gartner indicates that IT buyers will continue to be challenged by the economy in 2012, making it more difficult to make investments and drive change.  Buyers are looking for solution providers who can help facilitate the buyer’s journey, helping uncover and prioritize important opportunities for improvement, recommend the right solution options, justify decisions and deliver superior price / value.

Although the spending growth slowdown will be a challenge, solution providers have a unique opportunity to help facilitate this ever more difficult buyer’s journey with content and engagement practices to help facilitate and shorten cycles. Throughout the journey, marketing and sales engagements can provide content to help facilitate change and the decision making process, especially research insights, case studies, diagnostic assessments, benefit estimators, demos and trials, ROI business case and TCO comparison tools.

Source: Gartner Says Worldwide IT Spending to Grow 3.7 Percent in 2012, Eurozone Crisis and Hard-Disk Drive Shortage Impacting Spending

http://finance.yahoo.com/news/Gartner-Says-Worldwide-IT-bw-2012840990.html?x=0