Wednesday, August 26, 2015

TCO is So 1990: Why TCS is the new TCO!

Think back to the 90's: Bill Clinton and the Bull market, Flip phones and the Internet, Forrest Gump and Pulp Fiction, Boy Bands and Nirvana, Friends and Seinfeld... and if you were in IT, the rage was TCO – Total Cost of Ownership.

TCO was first developed in 1987, to help compare the costs of different compute infrastructure. At the time, it was a battle between big iron vs. PCs and networked computing. TCO was vital in helping CIOs understand the true costs of not just buying the infrastructure, but owning and managing the systems over their useful lifecycle. The on going costs of administration, support were 3 to 5x more expensive than the original purchase price –– a real eye opener for many.

TCO was valuable as a financial model, to analyze the true and complete cost of IT across the enterprise and over time. The model was asset based, CAPEX focused and for the most part, isolated to the datacenter, network and desktop. At the time, the activities and costs associated with 90s IT were relatively easy to codify – a chart of accounts with a handful of easily defined capital and operating expense categories.  You could examine internal spending and tally a handful of consultants and services providers to understand your true cost of computing or compare different solutions using the TCO model.

Today, enterprise IT is all about the Cloud, Big Data, Internet of Things, Mobility and BYOD. The business spends more on technology than central IT, compute services are sourced by business groups and users as a service, and new levels of technical and financial abstraction have emerged.  
To go along with the benefits of flexibility, scalability and agility with this new model, IT struggles with a loss of central control, compliance and security, way more configuration and services options, and more hidden costs and risks.

In a more complex and vital environment, the need for technology financial analysis is more important now than in the 90s. Public, Private and hybrid decisions abound, and having a financial model that can help organizations make the right choices is key. However good it was in the past, the old asset-centric TCO approach is difficult if not impossible to apply to the 2015 IT world.  

At the IT Financial Management conference in April, Bill Kirwin, well known as the “Father” of the original TCO models at Gartner, discussed the idea of Total Cost of Services (TCS), an evolved approach to determine the true costs of these new compute options and services.
Just like in the original TCO model, research shows us that it’s not just the initial Cloud service fees that have a cost, and that BYOD may not be the free lunch IT expected. There is a complex web of additional expenses, both internal and external to not just procure but manage, support and secure the business compute services.

Kirwin defines TCS as “the full life-cycle cost of the entirety of activities – driven by market forces and directed by policies organized with supporting processes and procedures - that are performed by an organization or part of an organization to source, plan, provision, operate, control and refresh IT services offered to consumers of those services.”

Here’s a quick comparison of how the TCS model can evolve the concepts of TCO and help create a better view of IT decisions and finance:

TCO vs. TCS
Old TCO
New TCS
Sizing
Asset based
Business Service Demands
Drivers
Resource based
Consumption based
Costing
Cap-Ex focused with defined refresh cycles
Op-Ex centric and continuous
Management and support
Centralized IT+ a few outsourced services
External services + Internal IT + Business + End users
Labor Drivers
Keeping the Lights-On vs. Innovation
Security and Compliance
End User Operations
Futz-factor and Peer support
BYOD and Shadow services
Indirect costs
Downtime
SLAs, Velocity, Flexibility, Scalability, Elasticity, Agility and Risk
Alinean

Technology needs a common costing model that will enable IT to compare different options and measure the true cost of these new service models.

For 30 years, TCO has been a useful metric to understand the cost of the old IT world.  But times have changed, and with it, the entire delivery model for IT services. As a result, we need a better financial model to help optimize service decision-making, and illuminate hidden costs and risks. TCS could be that new model.

When the “Father of TCO” says it’s time for TCO to grow up, perhaps it’s time to listen? 
TCS is the new TCO.


Bill Kirwin , CEO and Founder of IIIE, will be one of our featured presenters at the Value Selling and Realization Conference in Dallas TX on Feb 29/March 1 2016, discussing TCO and presenting the TCS model and it’s potential impact on technology decision making and optimization. Mark your calendars and stay tuned for this inaugural event.

Sources:
Comparing and Selecting Solutions Using TCO -

The Frugalnomics Survival Guide - How to Use Your Unique Value to Market Better, Stand Out and Sell More - http://www.amazon.com/Frugalnomics-Survival-Guide-Unique-Market/dp/0692350926






Wednesday, August 12, 2015

End Death by PowerPoint and 1,000 White Paper Cuts

Most organizations spend a significant portion of their marketing budget on creating content to fuel demand generation programs, and to arm sales reps to have better conversations and engagements. 

Unfortunately, the majority of this content spend is currently wasted.

SiriusDecisions reports that 55% of current content spending is squandered.  This means that a typical company is wasting $1 out of every $7 spent on total marketing each year.*

From these findings, ½ of the waste is because sales reps can’t find the content they need for particular selling situations. This has fueled many recent sales enablement investments in content portals and sales playbooks, and for good cause.

But this is only addressing ½ of the waste. The other half of the wasted spending is because the content that sales reps do find and use is not perceived as adding value.

A recent survey revealed that 78% of sales execs say that even though content is an important element for effective selling, only 40% believed their current content is actually helping make a difference in engagements. (Qvidian)

And buyers feel the same way, with 71% reporting that they were recently turned off by vendor content, and a perception that only 7% of vendor content is focused on what they care about, Value, versus a typical “Product Pitch. (The Economist)

It’s time to end “Death by Powerpoint and a 1,000 White Paper Cuts”. Your content needs to stand apart from the crowd and be better.
 
So what can you do to make your content more valuable and effective? The research points out three of the most effective ways:

1)  Make it Interactive – It’s “short attention span theater” out there, and buyers have less time than ever to research and investigate new solutions. It’s no wonder that 91% of buyers prefer content that is visual and interactive, this according to Demand Gen Report’s 2015 Content Preferences survey. This means producing compelling content that can personalize itself based on discovery, improving relevance and communicating unique insights. 
This is why more than 30% like interactive storytelling and 20% leverage diagnostic assessments and ROI calculators to help research and drive B2B purchase decisions, and these numbers are increasing every year. (Demand Gen Report)
2)  Leverage the NeuroScience of Decision Making– there are three buy buttons in the brain, and your content has to stimulate each in order to gain interest and drive positive outcomes:

1.   The “New Brain” and Logic - The neocortex is the part of the brain responsible for rational thought. To appeal to this part of the brain, your content needs to provide provocative insights, quantify “do nothing” costs and provide financial justification.

2.   The Reptilian Brain and Emotion - the cerebellum is responsible for fight-or-flight and basic survival. To stimulate this part of the brain, your content needs storytelling and using simple visuals, show clear contrast between how the status quo is risky / costly, and how your proposed solution can “save the day”.

3.   The Middle Brain and Trust - the "limbic brain is responsible for measuring credibility and gauging trust. To connect with this part of the brain, you r content needs success stories, customer quotes and videos so the buyer can relate to other’s successes and ultimately “see themselves” in the results.

3)  Focus on Value – You are proud of your solutions, but as a result, buyer’s think too much of your content is focused on you, your company and your products / services, versus what buyer’s care about, their challenges and the value they can achieve in you helping them solve these issues. 

Buyer’s almost unanimously wanted content to Focus less on product specifics and more on value, Use more benchmarking data and research to support content, and to Provide more insight from industry thought leaders/analysts. (Demand Gen Report)

The Bottom-Line

It’s not enough to just work on making content easier to find, you have to make the content itself better as well. The three keys include leveraging more interactive content, triggering the 3 buy buttons in the brain, with a focus not on product, but on value.  

With these improvements in your content, you’ll be fueling better sales conversations, making your prospect engagements more effective, and substantially reducing ½ of current wasted spend.

More tips about how to address wasted content spend and develop more effective demand-gen and sales content can be found in the book: The Frugalnomics Survival Guide – How to Use Your Unique Value to Market Better, Stand Out and Sell More

Sources:
The Economist Global Content Survey - http://www.missingthemark.ads.economist.com/infographic


* Content marketing typically represents between 25-30% of total marketing spend (CMI).

Thursday, August 06, 2015

Going to DreamForce? Get your VIP Tickets for the Smart Selling Tools Lounge

Join popular blogger / speaker Dan Sixsmith (@DigitalAdvantg) from the Alinean team, and other luminaries like Joe Galvin and Jill Konrath, for a much needed break and exclusive events / interviews at the Smart Selling Tools Lounge.

Get a free signed copy of the  latest book from Alinean CEO Tom Pisello - The Frugalnomics Survival Guide - How to Use Your Unique Value to Market Better, Stand Out and Sell More.

Grab some time with the Alinean team, other sponsors like Qstream and SAVO Group, and Smart Selling analysts like Nancy Nardin, to recharge, grab a coffee, beverage or snack, all while comfortably watching the keynotes on wide-screen TVs.

Learn more about the event and speakers schedule:
http://dreamlounge.smartsellingtools.com?utm_campaign=Alinean&utm_source=Alinean

Register with us ahead of the event for your exclusive VIP pass.


Wednesday, July 29, 2015

Smart Selling Tools: Value Selling & ROI Tools a Key Characteristic for Innovative Organizations?

Value Selling and ROI Tools are a key characteristic of innovative organizations, and as with other Sales Tools, the majority indicates that Value Selling and ROI Tools can contribute to significant revenue growth.


These are the findings of a recent Smart Selling Tools research study of sales and sales enablement executives, investigating B2B Sales Tools to determine which delivered the biggest benefits.

The study looked at the usage and effectiveness of many different Sales Tools including those for prospecting, managing pipelines, sales intelligence, CPQ (Configure, Price, Quote), contract management, planning, compensation and Value Selling and ROI.

Value Selling and ROI Tools were in use at 42% of surveyed firms, and more had deployed these tools than sales contract management, territory and account planning, performance and compensation management, eSigning and gamification.

As organizations deliver and use these Sales Tools, the Smart Selling Tools research indicated a significant impact on Revenue Achievement and Growth. A whopping 88% of study participants reported a positive impact on revenue from Sales Tools.

A majority, 54% indicating a Significant Increase, and 34% pointing to a Slight Increase as a result of the Sales Tools.

One of the key findings: Sales organizations that are innovators or early adopters are more likely to use sales tools that help demonstrate ROI and provide value quantification. Value Selling and ROI Tools were found to be a key “strategic personality” of firms that are more innovative.

As well, according to Nancy Nardin from Smart Selling Tools, "Something else we uncovered in the research is this: Of all the tasks that make up the consideration and acquisition cycle, the one rated difficult by a majority of the respondents was "justifying the budget." In comparison, determining the need, and identifying potential solution providers were ranked as relatively easy. " Added Nancy, "This clearly demonstrates that sellers need to be armed to quickly move the conversation from product and functionality to risk/reward."

The full research report can be found at: http://smartsellingtools.com/b2b-sales-tools-survey/

An on-demand webcast discussing the results can be found at: https://www.youtube.com/watch?v=gJGhBNwYScg

Friday, July 24, 2015

Death of the B2B Sales Rep? An Interview with SiriusDecisions

Several analyst firms have predicted the "Death of the B2B Sales Rep", with their research indicating how sales reps are engaging later and later in the sales cycle and are being replaced by digital.

Are these findings accurate? What can you do to stay ahead of the curve?

We've been busy on this topic, and went right to the source with a compelling interview of Jim Ninivaggi, the Sales Enablement Practice Director for SiriusDecisions.

We discuss their latest research of 1,000+ B2B buyers, to separate the fact from fiction, and provide specific guidance on what you need to do now to remain more relevant and effective.

To learn more, checkout the On Demand recording and download the deck –


#SavetheB2BSalesRep

Thursday, July 23, 2015

Death of the B2B Sales Rep? An Interview with the Sales Enablement Lab


We recently had the pleasure of talking sales enablement with the Sales Enablement Lab and Thierry v. Herwijnen.

Tom Pisello, Alinean's CEO / Founder was interviewed about the recent proclamations on the Death of the B2B Sales Rep, and what his thoughts were on the future of B2B selling and sales enablement.

The original recording can be accessed at: http://www.thierryvanherwijnen.com/s1e9/


There has been some controversial research from several top analysts on the Death of the B2B Sales Rep. Can you tell us about some of these latest findings?

Absolutely, one of the most referenced metrics comes to us from CEB, the creators of the Challenger Sale. Their research indicates that when B2B buyers are making a purchase decision, they go 57% of the way through the buyer’s journey BEFORE engaging with a sales rep.  The study highlights that today’s more empowered buyer is engaging digitally versus personally through most of the cycle.

Forrester reports that this shift to digital buying is real, and as a result, there will be a 22% decline in the number of B2B sales reps over the next 5 years. If this prediction is realized, this means that over 1 out of 5 B2B sales reps, that’s over 1 million folks would go the way of the dodo – replaced with digital buying.

Andy Hoar, Principal Analyst at Forrester, reported these findings at their last Sales Enablement conference and Thierry, you and I were both there. I can still hear the collective gasp and quite a level of uneasiness from the crowd at this reveal.


But not all the analysts agree with this research?

Indeed, some are calling these metrics an “urban myth”.

Analysts Marisa Kopec and Jennifer Ross revealed a thorough set of SiriusDecisions research at their annual event in Nashville this past May, a survey of more than 1,000 B2B executives who were involved in a significant purchase decision within the past six months and tallied 500M in B2B purchases across North America and Europe.

According to the research results, Marisa reported that B2B buyers interact with sales reps not just at the end of the process, but at every stage of the buyer's journey.  

According to the study, more than half the time, rep involvement starts at the beginning of the  journey. For more complex purchases, sales rep engagement starts at the beginning of the journey even more - two-thirds of the time.

In fact, the highest level of engagement with sales reps occurred during the education phase of the buyer’s journey, the first decision gate in the purchasing decision process.

These findings directly contradict the findings of CEB and Forrester that b-to-b sales reps’ role and importance are declining due to a disintermediation by B2B marketing and digital resources.


In a recent blog article, you point to several B2C examples that could perhaps point the way to what lies ahead for B2B sales reps?

B2B is quite different than B2C. In B2B it’s other people’s money vs. your own, it’s a consensus sale.

But despite the differences, there are similarities in terms of how digital has played a role in how consumers buy, and how this has changed the game.

If you look at several B2B markets, several commodity sales careers were completely rocked by the explosion of on-line resources, apps and ecommerce. Amazon continues to contribute heavily to the death of retail sales. Music streaming has reshaped the music business. Expedia and Orbitz have definitely had an impact on travel agents.

If we look at amore complex B2C sale, say real estate, maybe this can help us understand how B2B may be impacted over the next few years.

With so many on-line resources available, many have predicted the demise of the real estate agent over the past 15 years. But the evidence shows that these reps are still going strong despite a much more empowered customer.

Back in the day, the real estate agent held all the cards. For a short period of time to help put me through school, I became an agent in NY, so I know this space well. Information and pricing about available and comparable properties … this was all obfuscated by cryptic MLS listings and exclusive to the agent.

This was all pre Zillow, Trulia and Realtor.com. Now, it’s amazing the amount of available information on every neighborhood and property - pricing, value estimates, school information taxes and more. So with these advanced tools and amazing information, why do agents even still exist?

Despite these advances, not only does the real estate agent exist, they appear to be more engaged than ever, with an article in the Washington Post highlighting that today, 89 percent of buyers retained an agent, up from 69 percent in 2001. It's the same on the seller side, where only 9 percent sold a home without an agent, down from a high of 20 percent in 1987. 

So why are real estate agents still relevant?
  • A significant purchase decision – Your home represents one of the most significant investments you can make. There is high risk if you make the wrong decision (wrong schools, hidden costs or overpay), sell to early / late (as we learned during the bubble), and high reward if you get it right (great capital gains, no worries and awesome lifestyle). Agents are much better today at explaining the risk adjusted ROI, helping to ease the emotional strain and providing financial justification.
  • Unique insights – Agents today are much better at knowing the market, especially culling information that is not publicly or easily available. The most successful use these unique insights to teach the buyer, guide the decision making process and provide an edge (eg. Segmented pricing analyses, pocket listings).
  • Diagnostic advice – almost like a doctor, today’s better agents are assessing buyer / seller needs: asking the right questions to guide the buy or sell decision making process and generate better outcomes.
  • Consensus required – Most real estate transactions involve multiple decision makers on both the buy and sell side. Perhaps the most important role of the agent today is working with couples to gain consensus – easier said than done with so much money and emotion at play. The agent has to get couples on either side of the table on the same page, and then gain agreement quickly between buyers and sellers are the most successful.
  • Complex buying process – there are many steps to manage in the listing, search and purchase process. The agent helps shepherd the stakeholders through each step to make sure they are prepared and the transaction goes smoothly through each step of the process.


What are a couple of things you can do today to stay relevant, to stay in the game and be really effective?

The predicted demise of the B2B sales rep like the real estate agent has been greatly exaggerated. However, like how real estate agents evolved, there are several similarities and significant changes on the horizon that you need to be prepared for

However, like in real estate, the transactional agents of the 80s are not the agents of today.  And if you as an agent didn’t make the transition, you found another career or were replaced by a more savvy and capable newer generation of super agent.

Today’s best are more diagnostic, more consultative, and despite a plethora of online information, have found a way to leverage these and other tools to productivity, while at the same time uniquely valuable through the purchase journey.

So what should you do as a sales rep to stay on top of your game, or as an enablement partner to help your sales reps make sure they stay relevant and effective?

B2B sales reps need to engage effectively throughout the buyer’s journey, especially at the critical early stages of influence. The ability for sales reps to help buyers navigate the journey, gain consensus from committee decisions, and articulate your unique value – all critical for continued relevance and competitive sales success.

As a result, sales reps need to be enabled to:
  • Facilitate a complex journey - The buyer’s journey has become so non-linear and complex that it cannot be generalized, and is hard to guide with just on-line content and tools. It's a highly personalized experience, unique to each company and stakeholder, and requires careful and skilled facilitation.
  • Survive Frugalnomics - Buyers are indeed more empowered, but they are also more skeptical and frugal, more risk averse and require more proof points to get to “Yes” (Frugalnomics). And although buyers are doing more online research and they are more knowledgeable, the #1 piece of content requested by buyers today is still a sales presentation, according to SiriusDecisions. And rising in importance, an economic focus on ROI and the business case.
  • Enable Consensus - With more stakeholders involved in each purchase decision, some 43% more than just 2 years ago, each deal becomes an exercise in consensus building amongst all the stakeholders. 

  
You are doing an Interview with Jim Ninivaggi on this topic on July 23rd, can you tell us about this session?

On July 23rd we'll be interviewing Jim Ninivaggi, SiriusDecisions’ Practice Director for Sales Enablement on topic on the Death of the B2B Sales Rep. 

We’ll be debating the other research, what’s real and what’s not discussing their new research, the impacts this can have on you, and what you can do today to help overcome the issues.  It promises to be controversial and incredibly valuable to your career success.

>>> The On-Demand Interview is available here: https://alinean.webex.com/alinean/lsr.php?RCID=bc511f3fd963493d9516a894b41763c1


As well, you’ve written a book on this topic, to help improve sales / marketing effectiveness: Can you tell us a little about it?

Indeed. As this research and debate highlight, b2B selling and marketing have changed. We are living in an environment of Frugalnomics – challenged by a more empowered, skeptical and frugal buyer. 

So to help, I wrote the book - The Frugalnomics Survival Guide - How to Use Your Unique Value to Market Better, Stand Out and Sell More (available on Amazon.com).

The book highlights an incredible finding – the alignment between the ancient art of persuasion from Aristotle and the neuroscience of decision-making. What we found in this alignment was 3 buy buttons that you can use right away to better communicate and quantify your unique value, and to get your prospects to “Yes”.