Wednesday, March 30, 2011

Spring has Sprung, and So Should New Sales and Marketing Practices

Spring is in the air for us here in the United States, and with the long winter many have had, the change in seasons can’t come soon enough.

But the season is not the only change in the air. If you are in B2B sales and marketing, there is another forecast that is just as promising, especially if you recognize the pending fertile business opportunity and prepare accordingly.

It is not often we see so many thought leaders and pundits confluence around such significant observations:

• At Forrester, sales enablement analyst Scott Santucci indicates that “We are in the middle of a major transformation in the B2B sales model, driven by customer’s enterprise-wide strategic procurement initiatives to buy only what they need at the lowest possible price”.

• Marketing luminary Seth Godin indicates that "No business buys a solution for a problem they don't have." And yet, so many B2B marketers launch into presenting the cool features and functions of their product, without taking the time to understand if the person on the other end of the conversation/call/letter believes they even have a problem that the product hopes to solve.

• At IDC, research indicates that B2B purchase decisions more than ever being driven by financial requirements, such as enabling business growth (30%), improving profitability (25%), and reducing costs(22%) versus other goals, leaving the economic-focused buyer clearly in control.

• Marketing guru Geoffrey Moore, who’s Crossing the Chasm remains the guidebook for many technology marketers, indicates that buyers are forced to do-more-with-less, leaving less than 15% in discretionary funds to fund new projects, and with less money to go around, subjecting proposals to higher levels of review in buying organizations.

• At SiriusDecisions, analyst Jim Ninnivagi indicates that it’s easier for B2B buyers to “do-nothing” than “challenge the status quo”, leading to hundreds of missed selling opportunities and stuck sales processes.

At Alinean, we have coined this new B2B challenge Frugalnomics, indicated by buyers who are more:

1. Empowered: Fueled by the Internet, with access to a wealth of resources, research, discussions, product and pricing information, buyers are self-empowered to drive the buying cycle, inviting sales later and later into the decision making process, if at all. Commodity sales professionals are being disinter-mediated.

2. Skeptical: Inundated with more carpet-bombing marketing campaigns than ever before, buyers are suffering from information overload, making it difficult, if not impossible, to use legacy strategies to break through the noise to connect and engage with decision makers, and moreover, gain their trust. B2B buyers are now relying on industry analysts, peers and trusted 3rd party publications, but not on vendors, to help them facilitate important purchase decisions.

3. Frugal: With two economic downturns over the past decade, buyers have been forced to do-more-with-less, and CFOs have gained more formal control over business groups and key purchase decisions, leading to an unprecedented level of financial due diligence on proposed spending. Quantified savings, tangible bottom-line impact, low risk, significant return on investment (ROI), and fast payback are the new language of the economic-focused buyer.

Clearly the pundits are onto something: B2B buyers have fundamentally and permanently changed, and the B2B sales and marketing professionals that realize Frugalnomics is in full effect, and change strategies and tactics to fight back, will be the winners over this next decade.

Frugalnomics Changes Everything
As many of us have already realized, two economic firestorms in the past decade have fundamentally changed B2B buyers – making them more empowered, skeptical and frugal than ever before. And this is not just a temporary change. As we saw in technology bubble-burst, even when the economy recovered, technology sales and marketing was never the same, and this promises to hold true for B2B in general in the wake of the Great Recession.

There is a cold hard fact: the old selling approaches don’t work well in today’s environment:

Product Selling: Approach today’s buyer with a product selling approach, presenting features, functionality, and benefits, and the buyer’s eyes will glaze over. Product Selling relies on the buyer to connect the dots - understand the application and outcome of the solution that they can receive. Buyers just don’t have the time, patience and resources for this “you figure it out approach”. However, we find that over 30% of vendors and sales professionals still rely on this antique sales approach.

Solution Selling: The most common sales approach today with over 60% of sellers, Solution Selling is where vendor’s sales team “seeks out current concerns in a question-and-answer dialogue with customer managers”. According to Geoffrey Moore, solution selling is not dead, as it is “still the right approach when the customer understands the challenge to be faced and has the budget in place but believes that point products or services are insufficient to solve the problem.” However, this approach does not work well higher up in organizations, as executives want insight and advice, not question and answer sessions. Moreover, most buyers are so overloaded that they often are not even aware of “pain” you are trying to solve. These overloaded customers want consultative advice and a focus on value / outcomes, not just a salesperson listening for keywords and presenting canned advice.

How to Fight Frugalnomics?
So how do you prepare for the changes these forecasts predict? According to Forrester’s Scott Santucci, “Buyers are stratifying their suppliers into a caste system, increasingly delineating strategic vendors from commodity providers.” To prevent being relegated to a commodity provider, fighting it out on undifferentiated offerings and discounts, a new set of sales and marketing best practices are emerging.

Although the pundits each have different names for the recommended strategies, each highlights the need for a consultative and proactive value-based approach to Fight Frugalnomics:

Provocation-Based Selling –– coined by Geoffrey Moore, this methodology helps to loosen the “status-quo”, by making the buyer aware that there is a cost-of-doing-nothing, helping to proactively and holistically:
1. Illuminate issues, of which they might not have been aware,
2. Confirm the symptoms they were aware of, but could not easily put a name on,
3. Prioritize which issues require the most ardent pursuit, and quantify the competitive or other value which may be achieved by resolving the issue (creating urgency),
4. Recommend, based on priorities, a solution roadmap to stepwise remedy the issues.

Outcome Selling – coined by Forrester, a go-to-market approach where you design your value communications system to optimize the value your customers realize, the value referring to the specific "know how" your clients need to achieve an outcome. This methodology includes replacing the traditional Product, Place, Promotion and Price with a new 4-Ps mantra of:
1. Problem - What are the customer’s problems – those they know about, and those of which they may not be aware / have not yet been diagnosed?
2. Pattern - How will your solution solve their problem? Who will use your product?
3. Path - How will it be purchased and how can you help facilitate the decision cycle? What does the customer need to be successful?
4. Proof - What is the quantified value the solution will deliver with regards to reducing costs, driving incremental revenue / margin or other tangible business benefit, and what additional business benefits will the solution deliver such as reducing risks, or driving agility?

Value Selling – coined by several industry leaders including Alinean, helping to facilitate the customers buying cycle by proving the tangible value a solution can deliver at various decision points:

1. Engage – connect to set the stage for value discussions via personalized communications, illuminating for prospects how others with similar businesses, size , geographic location, and indicated pain points have resolved pressing issues and realized tangible value using the providers solutions.

2. Diagnose – survey current buyer strategies, spending and best practices to determine what issues the buyer might have, helping them prioritize issues via competitive benchmarking versus peers and leaders, highlighting the value of remedying the gaps, and providing a roadmap of solutions to help solve the most pressing ailments.

3. Justify – Prove that the proposed project should be a priority over all others by creating a business case for the proposed solution roadmap, first by quantifying for the buyer what maintaining the status-quo is costing - the current “cost of doing nothing”, then tallying the required investment, benefits, ROI and payback of proposed solutions.

4. Differentiate – Assure the buyer that they have made the right vendor and solution choice, quantifying that the selected solution from the provider is the best choice to deliver superior value at a lower total cost of ownership (versus lower price).

5. Prove – post-project completion and deployment, prove that the promised value has actually been delivered; quantifying the investments and benefits to assure that the target ROI has been achieved.

The Bottom-Line
Whatever the methodology, clearly the pundits agree that the old product and solution selling approaches no longer work with today’s more empowered, skeptical and frugal B2B buyer.

Saavy sales professionals and marketers realize this forecast shift and are quickly moving from product / solution selling to one of these new selling methodologies (provocation-based, outcome or value selling) in order to prevent becoming a commodity provider and elevate to “trusted advisor” status.

Those having already recognized the forecast and making the shift to value selling are already reaping rewards including more / higher level prospect engagements, increased deal flow, shortened sales cycles, less discounting / higher deal size, and increased competitive win rates.

As it takes time and an investment to develop the content to support value selling programs, and to train and transform traditional go-to-market methods, sales professionals and channel partners, those that move quickest will “catch the wave”, while those that fail to heed the pundit forecasts will have a difficult if not impossible time catching up.

Additional Resources and References:
• Provocation-Based Selling: Loosening the Status-Quo
http://blog.alinean.com/2011/03/provocation-based-selling-loosening.html

• The Big O: Outcome Selling
http://blog.alinean.com/2011/03/big-o-outcome-selling.html

• Diametrically Opposed Forces: Selling Value in a Buyer Controlled World
http://blog.alinean.com/2011/01/diametrically-opposed-forces-selling.html

• Don’t Just Sell the Problem, Quantify It
http://blog.alinean.com/2010/08/dont-just-sell-problem-quantify-it.html

Wednesday, March 23, 2011

Alinean recognized by BtoB Magazine’s as one of Top Agencies for 2011

With the economic recovery in 2010, top advertising firms and interactive agencies were finally able to report the return of healthy growth, according to BtoB Magazine's 2011 Top Agency Report.

 
At Alinean, we were very pleased to be recognized by BtoB Magazine as one of the Top Agencies for 2011.

 
For us, things have never been better, as even through the economic slowdown Alinean continued record growth. Why? Savvy B2B marketers realized that:
  1. Buyers had fundamentally and permanently changed,
  2. Frugalnomics was in full effect
  3. New value-focused campaigns and tools such as interactive white papers, diagnostic assessments, ROI calculators and TCO comparisons (which twe at Alinean pioneered), were needed to connect, engage and sell to these ever more empowered, skeptical and frugal buyers.

 
Over the past 12 months, Alinean has focused on existing customer relationship, developing and delivering even more value-based campaigns for leading B2B firms such as IBM, HP, EMC, Dell, Microsoft and SolidWorks, while adding a record two dozen new clients including ShoreTel, BMC Software, Trend Micro, Wabash National, OfficeMax, Plantronics, Sage and CSC.

In 2010 we were recognized as one of the fastest growing private companies by Inc Magazine, and awarded as a Florida Company to Watch. We added key new solutions, such as interactive white papers, and added several new key team members to help us deliver even more value-based sales enablement and demand-gen solutions and services to our blue-chip client roster.

 
Click here to learn more about the BtoB Magazine's Top Agency award.

Provocation-Based Selling: Loosening the Status-Quo for Sales Success

In a recent Harvard Business Review article, one of the most respected names in technology marketing and strategies, Geoffrey Moore (Crossing the Chasm) discussed how diagnostic and benchmarking sales techniques can be used, particularly during a downturn, to help engage executives, open up new opportunities and unfreeze previously stuck sales processes.

Moore describes the bad news facing B2B solution providers:
  1. Forced to do-more-with-less, most organizations lack formal budgets for new projects, leaving less than 15% in discretionary funds to fund a backlog of projects, likely your proposal.
  2. With less money to go around, proposals are subjected to higher levels of review in buying organizations, and the managers you’ve traditionally dealt with are no longer the decision makers.
Geoffrey Moore confirms simply that what we have termed Frugalnomics is in full effect.

The good news, is that savvy marketers and sales enablement groups have found a way to succeed in this tough environment, using a best practice approach coined Provocation-Based Selling – using diagnostic assessments and benchmarks to reach their customers’ resource owners and motivate them to allocate the necessary funds, persuading customers that the solutions they bring to the table are not just nice, but essential.

Frugalnomics Changes Everything
As many of us have already realized, two economic firestorms in the past decade have fundamentally changed B2B buyers – making them more empowered, skeptical and frugal than ever before. And this is not just a temporary change. As we saw in technology bubble-burst, even when the economy recovered, technology sales and marketing was never the same.

There is a cold hard fact: the old selling approaches don’t work well in today’s environment:

  • Product Selling: Approach today’s buyer with a product selling approach, presenting features, functionality, and benefits, and the buyer’s eyes will glaze over. Product Selling relies on the buyer to connect the dots - understand the application and outcome of the solution that they can receive. Buyers just don’t have the time, patience and resources for this “you figure it out approach”. However, we find that over 30% of vendors and sales professionals still rely on this antique sales approach.
  • Solution Selling: The most common sales approach today with over 60% of sellers, the general approach to solution selling is where vendor’s sales team “seeks out current concerns in a question-and-answer dialogue with customer managers”. According to Mr. Moore, solution selling is not dead, as it is “still the right approach when the customer understands the challenge to be faced and has the budget in place but believes that point products or services are insufficient to solve the problem.” However, this approach does not work well higher up in organizations, as executives want insight and advice, not question and answer sessions. Moreover, most buyers are so overloaded that they often are not even aware of “pain” you are trying to solve. These overloaded customers want consultative advice and a focus on value / outcomes, not just a salesperson listening for keywords and presenting canned advice. (See article here from the creators of Solution Selling (r) to see what they had to say about Moore's comments: http://www.solutionsellingblog.com/home/tag/provocation-based-selling)
According to Mr. Moore “Whereas solution-selling listen for “pain points” that the customer can clearly articulate, provocation works best when it outlines a problem that the customer is experiencing but has not yet put a name to.”

Fight Frugalnomics with Provocation-Based Selling
Provocation-Based Selling works best in the earliest stages of the buying cycle, where it is currently easier for the buyer to avoid spending precious budget dollars and new project risk. Provocation-Based Selling helps to loosen the “status-quo”, by making the buyer aware that there is a cost-of-doing-nothing, helping to proactively and holistically:

1. Illuminate issues of which they might not have been aware,
2. Confirm the symptoms they were aware of, but could not easily put a name on,
3. Prioritize which issues require the most ardent pursuit, and quantify the competitive or other value which may be achieved by resolving the issue (creating urgency),
4. Consultatively, based on priorities, recommend a solution roadmap to stepwise remedy the issues.

How to develop your own Provocation-Based Selling Program?
So this approach seems to make a lot of sense, but how do you get started in implementing this methodology and what is required?

We have found that it should be applied for a particular solution set / grouping, and its best to start with one product line in mind. Moore offered several key steps to help develop a Provocation-Based Selling Program:

1. Identify a critical problem – find the critical issues the buyers / decision making executives may be facing in their industry, company specific challenges, or group / day-to-day challenges, and that are aligned with what your solutions can help resolve.

2. Formulate your Provocation - The provocation can be formulated into a diagnostic / assessment methodology and tool. We recommend implementing a tool with the following components to help automate the provocation process:
  • Survey – In order to diagnose key issues, you often have to ask a few questions. These questions often probe the customer on their current sentiment, goals / plans, management practices and spending.
  • Benchmark Comparison – from these survey data points, the current (as is) of the customer is compared against a set of known data points representing what others are doing – a benchmark. Comparing the customer’s survey responses to those of peers, and especially leaders, confirms where the organization is doing well, and more importantly illuminates where the organization is falling behind / lagging the competition and/ or best practices.
  • Diagnostic Assessment – comparing the survey versus the benchmark, the tool and sales team can assess where the customer needs to improve the most – where they are lower performing compared to peers and leaders – highlighting specific issues and priorities.
  • Roadmap Advice – for each priority, a solution is recommended, forming a stepwise recommendation of potential remedies over the next couple of years.
  • Outcome / Value – as organizations are risk averse, there often has to be more than competitive pressure justification to approve a plan. From the customer’s current improvement opportunities, and the recommended proposed solutions, an estimate is made as to the value of the improvements – how they can help the customer do-more-with-less, cut current costs, avoid future capital spending, reduce operating costs, generate more revenue / business, reduce business risks, and become more flexible / agile. Quantifying the benefits is a requirement for today’s economic-focused buyers.
  • Next Steps – with buyers more overloaded than ever, the first steps towards health are so important. A succinct action plan is essential, covering how to get started on the way to the cure, over the next 30 / 60 / 90 days.
3. Lodge you Provocation - The delivery of the program and presentation of results is an important aspect of the provocative selling method.

For marketers, the diagnostics can be used as the centerpiece of engagement campaigns, offering a free assessment to respondents, and a part of the offer may go like this: “We’ve worked with companies in your peer group and have seen how the leading players are experiencing this painful problem. We think it’s possible that your company is at risk in this area as well."

For sales professionals, the provocation engagement and presentation are vitally important. The engagement needs to be a facilitative discovery process and not a confrontation or a sales pitch, helping the customer to uncover the issues that might be preventing them from reaching their goals and helping them realize that change would “do them good”. According to Mr. Moore, “The goal is to disturb the executive’s equilibrium—and make the status quo untenable—without putting him or her on the defensive. Presenting specific, well-supported concerns and remedies in a forthright manner keeps the focus on business performance for an executive who is accountable for it.”

Provocation-Based Selling Examples
So what do provocation-based assessment programs look like? Having pioneered the development of tools and methodologies with several major B2B vendors over the past ten years, we present a couple of representative provocation-based selling campaign examples:

Microsoft Infrastructure Optimization Assessment
Microsoft wanted to find a better way to engage with decision makers for core IT infrastructure, business productivity, and application development, but was having trouble moving its enterprise sales group and channel partners from the traditional product / solution presentations.

To address this opportunity, Alinean developed a suite of Microsoft Infrastructure Optimization Assessment tools, which are used to diagnose customer’s most pressing issues, and help them advance along a four step capability & maturity model. The suite consists of three assessment tools to engage at a strategic level with core IT infrastructure, business productivity and application lifecycle development decision makers. The tool is available on-line, so customers can assess themselves directly, but is most often used in consultative sales-led workshops, promoted by marketing via direct e-mail campaigns, offering a free insightful IT, business or application development assessment.

With a comprehensive survey of 60 practices questions, the tool analyzes responses against a dynamic and growing database of other participants, and a capability & maturity best practices model, helping the customer benchmark their performance to confirm where they are performing well, or identify where they are falling behind best practice leaders and peers and need improvement.

The assessment tool automates the benchmark comparisons, scoring and intelligent recommendations, delivering a compelling 20+ page assessment report. In a tough selling environment, the tool has helped Microsoft and its channel partners proactively engage customers, collaboratively set customer goals and strategies, help deliver tangible savings and incremental value to customers, while allocating discretionary budget to Microsoft proposed projects.

The assessment tool has been available since 2008 and has been fueling direct marketing programs by Microsoft and channel partners. The tool consistently generates more than 600 analyses per month, driving more high level customer engagements, significant evolution of Microsoft’s relationship with clients from tactical to strategic, and generating substantial multi-million dollar incremental sales opportunities.



Trend Micro Risk and Compliance Assessment
Trend Micro wanted to help busy security officers and IT managers quickly and easily understand and assess their security and compliance management policy shortfalls and risks. To address this need, Alinean created the Trend Micro Risk and Compliance Assessment tool, designed to benchmark a company’s current security risk and compliance practices versus peers and best practice leaders.

From a 20 question survey, the risk and compliance assessment tool collects current management practices information. These responses are compared to prior responses from peers and a best practice framework, to confirm which practices are already in place, help illuminate which practices are missing or less than adequate, and develop a roadmap to help reduce risks and improve security and compliance management capability and maturity. A comprehensive 20+ page assessment report is delivered to the customer to help frame the issues they are facing, create urgency that doing nothing is too risky / costly, and provide a consultative and justified guide to improvements.

Available directly to customers for self-assessment, the on-line tool is the focus of e-mail and on-line / social media campaigns, offering a diagnostic assessment to entice security and compliance officers and stakeholders. The tool has been used to capture hundreds of incremental / high quality leads per month, driving incremental higher level customer engagements and hundreds of additional sales opportunities in a tough selling environment.


Sage Pacer Survey
With cost control and justification being a focus for most executives, most organizations are often wary to make a change unless they know that doing-nothing actually has a cost and justifies the necessary investment for change.

Leading business management software provider Sage understood that prospects needed some real diagnostic advice to help them assess and identify current business issues they may not have been aware of, and justify important changes.

Alinean worked with Sage to develop the Pacer Survey, an on-line tool that uses a 20 question survey to collect important information about the current state of the prospects’ business, and benchmarks the responses against peers and leaders. From this comparison, the tool helps identify potential improvements and consultatively recommends / promotes improvements and remedies utilizing Sage’s solutions and other best practices.

Using the tool to self-diagnose their issues, or in a sales-led workshop, the tool delivers a 20+ page personalized diagnostic assessment reports. Sage successfully uses the tool to connect and engage higher in prospect organizations, drive more, higher quality leads, realize additional sales opportunities that it would not have otherwise.




The Bottom-Line

With buyers more empowered, skeptical and frugal than ever, it is increasingly difficult for B2B sales professionals and marketers to connect, engage and sell using traditional methods. Even as the economy recovers, buyers have fundamentally changed and require a new approach in order to gain sales success.
Provocation based selling, the use of diagnostic assessment tools, is one method that can be used to help buyers recognize a heretofore unknown need for your solutions, increase the priority of your proposals, gain a piece of the scarce discretionary funding pie.
Example after example has proven that this approach, implemented by early-adopter sales enablement groups and marketers, has led to more strategic / executive engagements, opened up significant new sales opportunities, and driven incremental sales.


References and Resources:
Geoffrey Moore’s Harvard Business Review article In a Downturn, Provoke Your Customers can be found at: http://bankblog.optirate.com/wp-content/uploads/2011/02/In-a-Downturn-Provoke-Your-Customers.pdf

Another leading sales and marketing luminary, Seth Godin, holds similar points of view, outlined in this blog commentary at: Don’t Just “Sell the Problem”, Quantify It, at: http://blog.alinean.com/2010/08/dont-just-sell-problem-quantify-it.html
For more examples of successful assessment tool programs, visit: http://www.alinean.com/sales-enablement/assessment_tools.aspx

Tuesday, March 15, 2011

The Big O – Outcome Selling

Today’s buyer is more empowered, skeptical and frugal than ever before, providing a greater than ever challenge to sales professionals, and shaking the very foundations of traditional selling models. At Alinean, we have coined this new B2B challenge as Frugalnomics, indicated by:

1. Empowered Buyers: Fueled by the Internet, with access to a wealth of resources, research, discussions, product and pricing information, buyers are self-empowered to drive the buying cycle, inviting sales later and later into the decision making process, if at all. Commodity sales professionals are being disinter-mediated.

2. Skeptical Buyers: Inundated with more carpet-bombing marketing campaigns than ever before, buyers are suffering from information overload, making it difficult, if not impossible, to use legacy strategies to break through the noise to connect and engage with decision makers, and moreover, gain their trust. B2B buyers are now relying on industry analysts, peers and trusted 3rd party publications, but not on vendors, to help them facilitate important purchase decisions.

3. Frugal Buyers: With two economic downturns over the past decade, buyers have been forced to do-more-with-less, and CFOs have gained more formal control over business groups and key purchase decisions, leading to an unprecedented level of financial due diligence on proposed spending. Quantified savings, tangible bottom-line impact, low risk, significant return on investment (ROI), and fast payback are the new language of the economic-focused buyer.

B2B buyers have fundamentally and permanently changed, and the B2B sales and marketing professionals that realize Frugalnomics is in full effect, and change strategies and tactics to fight back, will be the winners over this next decade.

According to Scott Santucci, sales enablement analyst at Forrester, “Buyers are stratifying their suppliers into a caste system, increasingly delineating strategic vendors from commodity providers.” To prevent being relegated to a commodity provider, fighting it out on undifferentiated offerings and discounts, a new set of sales and marketing best practices are emerging.

Fight Frugalnomics with Outcome Selling?
At the Forrester Technology Sales Enablement Forum earlier this year, Forrester introduced an umbrella term to describe these practices, Outcome Selling, defined as “a go-to-market approach where you design your value communications system to optimize the value your customers realize.”, the value referring to the specific "know how" your clients need to achieve an outcome.

On the surface, this may not seem like a big shift for many companies, but when you think about the current way most sell and market, it is no less than dramatic.

Product Selling No Longer Works
Visit most B2B websites, or view a sales professionals presentations, and you will find many are still centered around product features, functions and price - focused on the vendors solutions versus the value the solutions deliver. This approach relies on the buyer to figure out what pain points the solution can address, and the specific outcomes the solution might deliver.

In fact, when buyers were asked to characterize sales professionals, over 27% indicated that “They only want to tell me about their products and services.”

With less resources than ever before, buyers demand more proactive consultative advice and support throughout the buying cycle. Expecting buyers to figure out what a solution can do for them, what value it can deliver is sure to lead to stalled buying decisions, and elongated sales cycles. Worse, the vendor is viewed as commodity provider versus trusted advisor.

Solution Selling Puts Focus on Pain Relief, But Not on Delivering Tangible Outcomes
The good news is that many B2B marketers have recognized the issues with the Product Selling approach, and have advanced to a Solution Selling, where sales and marketing tries to uncover buyer pain points, an inquiry of "what keeps the buyer up at night", and map solutions that can help quiet the indicated ailment.

Although better than Product Selling, the Solution Selling approach relies on the buyer to accurately know and clearly communicate their pain points. Today we find buyers struggling with too few resources, and as a result, they are often misdiagnosing ailments, unaware of serious issues they have, or how these pains should be prioritized to meet specific business goals.

For the B2B seller, solution selling focuses stakeholders on remedying the immediate pain , but often fails to deliver a cure by not focusing on the outcome – the tangible value the buyer may or may not receive as a result of the solution.

Do buyers think solution selling is working? When asked, buyers categorized over 41% of sales professionals as “listening for keywords and then quickly diving into prepared pitches, without truly understanding the true business outcome that the buyer is seeking.” This was the most common characterization of B2B sales professionals, so it’s no wonder that only 13% of buyers think sales meetings are valuable.

For marketers, solution based web sites and content are certainly better than the old product brochure website approach, helping guiding users to the right solution to remedy an immediate pain point, but a lack of outcome focus means that buyers perceive marketing content and campaigns as adding too little value in helping to facilitate buying decisions and partnership success.


Buyers Categorization of Sales People from Forrester Technology Sales Enablement Conference Presentation – February 2010

Outcome (Value) Selling to Drive “Trusted Advisor” Relationship
A continued focus by sales and marketing on the cure, Product Selling, or a on a quick remedy to the known pains, Solution Selling, has failed to deliver promised results to buyers. What is needed is a holistic focus not on the cure or pain, but on the outcome – a holistic approach to wellness.

A shift to the value outcomes, according to Forrester’s advice, requires that sales professionals and marketers move from the legacy 4Ps of sales and marketing – Product, Place, Promotion and Price, and move to a new mantra of Problem, Pattern, Path and Proof.


The Move from 4-Ps of Product / Solution Selling to the 4-Ps of Outcome Selling from Forrester Technology Sales Enablement Conference Presentation – February 2010

The 4-Ps of Outcome (Value) Selling include:

1. Problem - What are the customer’s problems – those they know about, and those of which they may not be aware / have not yet been diagnosed?

2. Pattern - How will your solution solve their problem? Who will use your product?

3.  Path - How will it be purchased and how can you help facilitate the decision cycle? What does the customer need to be successful?

4. Proof - What is the quantified value the solution will deliver with regards to reducing costs, driving incremental revenue / margin or other tangible business benefit, and what additional business benefits will the solution deliver such as reducing risks, or driving agility?

The recommended course to elevate sales and marketing to outcome (value) selling includes:

1. Diagnose Buyers Issues and Needs – buyers need help on properly identifying and diagnosing issues / opportunities. White papers can help provide ideas of what issues researchers see as important, but today, you need something more personal.

The most successful providers will provide assessments to help buyers benchmark their performance versus a best practice framework, competitors and leaders – an outcome focus. The diagnosis can help highlight proactively where the buyer is doing well already, or illuminate where they should direct resources and investments.

From the benchmarks, the buyer now has a framework for urgency, helping to drive decision cycles to change the status quo. From a quantified diagnostic, the sales team can now recommend the right solution roadmap to best step-wise resolve the priority issues and drive the desired best practice / competitive outcomes.

2. Build a Value Framework and Financial Justification System – In today’s frugal environment it is easier to do nothing than take the risk of making the wrong investment. The buyer needs help in understanding the “cost of doing nothing”, and the potential value of making a change.

Financial justification is required to make the business case for change, helping the buyer quantify the total incremental investment requirements, quantified benefits and potential risks. Key financials such as return on investment (ROI) and payback can help summarize the value the proposed investments have compared to alternatives under consideration.

3. Exploit Competitor Weaknesses and Prove Superior Value – frugal buyers today demand that they get the best deal on every purchase. You can be the best strategic advisor, but still lose the deal because another vendor offered a “similar” solution at a cheaper price.

Sales and marketing teams must realize that every deal is economically competitive, and superior value / lower total cost of ownership (TCO) must be proven to reduce unnecessary discounting and competitive losses.

The Bottom Line
B2B buyers have fundamentally changed to be more empowered, skeptical and frugal, changing the way they assess and purchase solutions. Saavy sales professionals and marketers realize this shift and are quickly moving from product / solution selling to outcome (value) selling in order to prevent becoming a commodity provider and elevate to reach “trusted advisor” status.

Focusing on the buyer’s problems, patterns, path and proof, the new 4Ps, help sales and marketing teams understand what is needed. While a roadmap of content and tools can help empower marketing campaigns and sales engagements to success, including Diagnostic Assessments, Financial Justifications and Competitive Comparisons.

B2B vendors can gain substantial advantages, including assuring that they avoid the coming commodity-trap. The benefits include:
1. a seat at the table to help drive business strategy vs. just responding to RFPs
2. high value sales with more reliable growth
3. maximized client satisfaction for improved up-sell / cross-sell and references

Done right, buyers also get significant benefits as well, which is what makes outcome (value) selling successful, including:
1. Unbiased insight to help diagnose and illuminate issues
2. Assistance in setting priorities and building solution roadmaps
3. Business case justification
4. Measurable performance improvements


Changing the relationship with buyers from commodity to strategic using Outcome (Value) Selling is proven to deliver substantial results.

Wednesday, March 09, 2011

The Demand Spectrum and Value-Based Sales & Marketing

Based on the lifecycle of your particular B2B company and product lines, you may find yourself in one of three distinctive categories that SiriusDecisions created to help define how to best market and sell your solutions.

The SiriusDecisions Demand Creation Spectrum consists of the following categories:

New concept: A disruptive product or service with no budgetary line item within target organizations. New concept marketing and selling is highly evangelistic and requires significant ability around uncovering issues and finding highly influential, highly motivated prospects.

New paradigm: A product or service that promises to retool or optimize an existing process, or solve a known issue more effectively than currently believed to be possible. The replacement (or at the least the augmentation) of a product or service making up an existing line item will generally be required with this type of demand.

Established market: A product or service that is accepted by the majority of target organizations to be necessary and best-of-breed. The market for these products and services is generally served by a few powerful providers that battle with each other for market share.



To reach today’s more frugal / skeptical buyer, communicating the value of proposed solutions is critical. During a recent webinar, we received a question as to if value selling / marketing best practices change and which should be the focus based where your company and product are across this spectrum.

New Concept
New concepts are often the most difficult to market and sell, in fact, SiriusDecisions has found that marketing and sales spending nearly doubles for new concept launches versus established market introductions.

Why are the expenses higher? First buyers often don’t know they formerly have the problem that you are trying to solve, and if they do, aren’t aware of potential solutions, so education becomes crucial. Budgets typically don’t exist, requiring an innovator to take hold and champion the purchase to an equally innovative executive team.

Making New Concept sales more challenging than ever, in today’s frugal environment buyers have been forced to do-more-with-less, and are struggling with having enough resources to keep up with day-to-day work, much less consider something new. They often don’t have the resources to investigate their issues completely, or explore new potential solutions.

Value Selling and Marketing for New Concepts: For new concepts it is most important to get buyers to understand the issues they have, and how these issues can potentially be solved by the new concept.

Much like a doctor diagnosing a patient, you will need to illuminate issues the client might not even know they have, and provide solid proof that a new solution exists that indeed can resolve their ailments.

As the starting point for New Concept solutions, Alinean recommends a focus on the following value selling and marketing tools:

Interactive Assessment Tools: One of the best ways to diagnose issues is with an interactive assessment. Like a survey, the interactive assessment asks the prospect a series of probing questions. Unlike a simple survey, the interactive assessment in real time compares the responses versus “healthy” benchmarks, using on-line results and PDF reports to illuminate where the buyer has already made progress, but more importantly, where they have issues that these new concept solutions can address. Unlike surveys, the interactive assessment goes beyond simple surveys by quantifying the magnitude of the “health” issues in order to create urgency for change. The interactive assessment intelligently recommends solution options and highlights how particular features / options can help address the most serious issues.

Interactive White Papers: Most often with new concepts, white papers are used to educate a prospect as to the opportunities a new concept can address, and provide validation that a solution indeed exists to address the opportunity. Often these white papers include research from 3rd parties to help assure the buyer that the issue is indeed real, and that the solution is indeed a viable way to solve the problem. The issue with these white papers is that they treat all buyers the same, regardless of which industry they are in, their location, their size, what pain points they may be experiencing, their role in decision making, or their stage in the buying cycle. Interactive white papers represent a more personalized option, fine tuning the white paper based on the users’ precise profile – delivering one-to-one engaging content and advice.

New Paradigms
New paradigms offer a new or innovative way to address an already recognized opportunity. In this case, the buyer is aware of the problem and of legacy solutions that have been used to traditionally address the opportunity, but not of the novel way you are proposing to solve the problem, and the advantages that this new paradigm represents over legacy solutions.

For example, the new paradigm represented by cloud based services versus traditional premise based solutions, where the opportunity is well understood, but the novel way to address the computing service is not totally understood.

For new paradigm, the buyer already knows about the problem being solved, so they most often need education that there is a better way of solving it. But in today’s frugal environment, this can be difficult, as it’s often easier for buyers to “do-nothing” than take a chance on a new paradigm. Buyers often need to be convinced that there is a quantifiable financial savings/ value to make the paradigm shift, and compared to other investment options, that the new paradigm represents a low risk, high return, and fast payback use of funds.

Value Selling and Marketing for New Paradigms: For new paradigms, the key is to demonstrate that legacy solutions are leaving significant savings / upside benefits on the table, and that there is financial savings / gain to be had via the new paradigm. The key is to highlight how the new paradigm retools and improves existing processes, or provides a lower cost of ownership / superior solution.

ROI analysis /TCO Comparison Tools can be used to justify new paradigms, helping buyers quantify the current ownership costs for legacy solutions, and the savings / incremental benefits of the new paradigm in comparison.

Established Categories
Established categories already have a well defined market need and established solutions, with a fiercely contested and crowded marketplace. Buyers seeking solutions in established categories usually know the problem that needs to be solved, but might not be clear on how important it is to solve the problem, or what differentiates the different solutions and providers. Vendors in established categories struggle to differentiate their solutions and compete beyond price.

Value Selling and Marketing for Established Categories: For established categories, feature / function differentiation is paramount, and moving beyond initial purchase price is key.

ROI Analysis Tools: To differentiate features / functions, ROI analysis can be used to tie features to business savings / impact, quantifying bottom-line value.

TCO Comparison Tools: To advance pricing discussions, TCO comparison tools can move the discussions beyond initial price comparisons and help buyers understand the true cost of owning each solution being considered. The TCO comparison for select vendor options, tallies the initial purchase price and setup and delivery labor and costs, as well as the on-going management, support, evolution and retirement labor costs and fees over the useful life.

The Bottom-Line
With today’s frugal buyers, value marketing and selling is a requirement. Best practices highlight which sales and marketing tools to invest in depending on where your company and products are across the Demand Creation Spectrum.