Tuesday, August 19, 2014

How do you Develop and Communicate your Unique Business Benefits?

Are your sales and channel reps struggling to effectively communicate the unique value of your solutions to prospects?

If you answered “Yes”, you are not alone. While buyers are scrutinizing proposals with a keen eye on value / ROI, the average rep still reverts to a less than effective product centric sales pitch – focusing on your product, features and price vs. the buyer challenges and the differentiated value you can deliver in helping overcome these challenges.

The Value Gap – an inability for sales reps to effectively communicate value – is the top issue for B2B solution providers and indicated as such by a whopping 71% of execs in a recent SiriusDecisions survey. This is the 4th straight year that the Value Gap has been named as the top issue, making it an absolute imperative to put more time and effort into addressing this challenge.

In order to “Mind the Value Gap”, it is essential that marketing and sales develop and deliver the right value messaging and quantification – guiding sales reps to better articulate the benefits you can uniquely deliver, as well as personally quantifying what the "cost of do nothing" and benefits mean to individual prospects. One-size -fits-all value communications don’t cut it anymore.

More Effective Value Messaging, Communication and Quantification

So how do you develop effective value messaging and quantification that will be memorable and impactful on buyer purchase decisions AND are sales ready?

Unfortunately most value messaging development efforts take a decidedly product-centric view of the derived benefits vs. customer perspective, and most efforts flat out miss key benefits that are important to specific stakeholders.

Value Map™
It is important to have a framework to help your team derive the best differentiating benefits. One element of this framework is the Value Map, guiding the team to think about and categorize the benefits in customer-centric terms – around the challenges they are looking to solve and business benefits that are derived.

Benefit Categories?
We find that in most cases, the challenges and subsequent derived benefits can be grouped into four different categories of the Value Map:

1) Cost Savings / Avoidance – how your solution can help reduce specific  capital or operating expenses, or potentially avoid future purchases (not including labor or process related expenses).

Some examples:
·  Reduce a business expense, such as travel, telecommunication fees, printing or office space requirements
·  Reduce annual shipping costs
·  Cut the cost of goods sold (COGS)
·  Reduce inventory and carry costs
·  Consolidate several legacy solutions to eliminate annual maintenance and support agreements
·  Avoid a mandatory and expensive data center upgrade needed for the new fiscal year

2) Productivity / Process Improvements – how your solution can improve the productivity of specific workers, helping to reduce the time spent on inefficient tasks or decrease the skill level of resource required, or scale  and streamline a process workflow, helping to eliminate steps or errors while improving process effectiveness and efficiency.

Some examples:
·  Automate manual steps in a business process
·  Eliminate error handling in a business process and the lost productivity spent handling these errors / issues
·  Avoid wasted time users spend gaining access to business systems and data
·  Reduce the time it takes to setup and deliver an application test or production infrastructure.
·  Eliminate the number of escalated service desk calls
·  Reduce time to productivity for new hires
·  Reduce shipping errors and the customer service time required to reconcile the error.
·  Improving the change management process to reduce the percent of failed changes and the cost of failed changes and rework

3) Risk Avoidance – reducing or avoiding business risks, the chance that something bad will happen to the organization, and reducing the costs should the risk be realized.

Some examples:
·  Increase compliance with SLA’s and reduce non-performance penalties and late charges
·  Avoid corrective cost to repair damage to business reputation and recover operations as a result of a security breach
·  Improve agility to easily and quickly revoke specific user access rights to data, applications and assets to prevent unintended use or intentional abuse
·  Reduce the chances that the company will fail an audit or not complying with Sarbanes-Oxley internal controls or other  required compliance regulations.
·  Reduce the risks of legal fees, penalties and fines to address issues found in a failed compliance  audit
·  Reduce the risk of data theft and subsequent damage from record / IP disclosures
·  Reduce the chances for a system downtime event (outage)
·  Reduce the potential scope of the number of users, business processes and applications effected should a system outage occur.
·  Improving the ability to detect and resolve incidents proactively, which results in lower downtime to the business and higher availability of services

4) Revenue Growth – capturing revenue opportunities or avoiding potential revenue losses / challenges.

Some examples:
·   Reduce out-of-stock inventory and supplies when needed and the adverse effect on production, shipments and revenue recognition
·  Accelerate product design, development and test / certification for faster time to market Shift scarce resources from operations support to innovation and revenue generation
·  Reduce discounting
·  Accelerate sales cycles
·  Improve sales quota performance and new sales rep on boarding
·  Generate more better leads and sales opportunities
·  Improve competitive win rates
·  Reduce customer churn / losses

Organizing into relevant Quadrants?
To help the team align with buyer challenges and prioritize the communications of these benefits, each can be organized into quadrants by examining buyer’s typical perspective on the value that each category represents, on a scale measured by:

1) Strategic vs. Tactical Benefits – Strategic Benefits are usually aligned with creating and driving larger, longer-term business goals and what higher level executives tend to care more about, while more Tactical Benefits are aligned with executing specific improvement plans, and tend to relate more to practitioners.

Typically, Cost Savings and Risk Avoidance are more Tactical, while Productivity / Process Improvements and Revenue Growth are more Strategic.

2) Direct (hard) vs. Indirect (soft) Benefits – Direct (hard) Benefits tend to be derived from a straighter path from implementing the solution to deriving the savings / business benefit and more readily measured as a causal effect, while Indirect (soft) Benefits occur as a second / third order effect of the solution, with several non-direct steps from solution to derived benefits.

Typically, Cost Savings and Productivity / Process Improvements are more Direct (hard) Benefits, while Risk Avoidance and Revenue Growth are more Indirect (soft) Benefits.

Tailoring to Stakeholders?
To properly populate the benefits, the Value Map should be uniquely tailored for each of three potential stakeholders (or perhaps more based on who the decision makers are who are involved in evaluating and approving your proposals) – essentially creating multiple Map views, pivoting the value to articulate depending on which stakeholders are being engaged. The minimum set of stakeholders to consider include:

·     1) Technical – focused on the infrastructure / foundation needed to deliver solutions to the business, with an eye on Total Cost of Ownership (TCO) and cost savings, as well as risk (downtime, security, delivery)
·     2)  Business – focused on key business unit metrics for productivity and process, managing business risks (legal / compliance) and revenue growth.
·     3) Financial – an executive focus with an eye towards growing the business and revenue, and bottom-line impact.

With such a Value Map developed for your solution, with the proper value messaging and quantification tied to each, you can arm your sales / partner reps to deliver a more personalized and effective value conversation.

The Bottom Line

“Minding the Value Gap” is critical in making your sales reps and channel partners more effective.  Communicating the unique value of your solution relevant to each specific stakeholder is essential to differentiate you from competitors. 

In order to best capture this opportunity and increase revenue, we suggest that you review your current value messaging and identify the “white space” in the Value Map.  

Can your sales reps clearly articulate specific financial justification you deliver in each of the four quadrants of the Value Map: Cost Savings, Productivity / Process Improvements, Risk Avoidance andRevenue Growth? Complete the Value Map white space with simple but relevant quantification of your solution benefits in addressing stakeholder challenges .

You will gain significant advantage by using the Value Map to find the right differentiating benefits that cover the most important challenges for your buyer, addresses each stakeholders different value perspective, and uniquely makes your value more memorable and differentiated.

No comments: