by Dan Corcoran, Chief Technology Officer, VP Sales Enablement at Mainstay
How much business value can your customers expect to get from using your products or services? If you can only guess at that answer, your customers will have little confidence you can make a real difference in improving their business. Here are four tips for quantifying the value of your solution in ways that your prospects will consider credible, relevant, and ultimately, worth investing in.
- Know what matters most to each customer
Every customer has a unique set of business challenges that can drive interest in your products or services. So, understanding the business context of each customer is crucial to winning deals. Start your business case by finding out what benefits matter most to your customer and then quantify your value proposition accordingly.
Your customer might be hoping to capture an array of benefits—cost reduction, revenue growth, speed to market, and so on. In most cases, however, only a handful of features will generate the lion’s share of improvement in their business. Winnowing down your benefit list to a focused set of “must-haves” will help your client avoid the dreaded “analysis paralysis”—that’s when you lay out so many variables and choices that your customers can hardly focus on what really matters.
- Find out how your client measures value
Once you’ve discovered which parts of the business your prospect is trying to improve, figure out how you’ll measure success in those areas. Understand your customer’s threshold or hurdle rate—their minimum rate of return—and define specific targets you’ll need to hit, such as ROI, payback periods, or user growth. Then focus on those benefits that will get them over the hurdle. It’s not worth spending effort on benefits that don’t contribute significantly to the company’s metrics of success. The old adage, “don’t sell past the close” remains good advice.
Remember that the benefits your clients are searching for may not always be measured in financial terms, like dollar savings or revenue growth. Sometimes they’re shooting for non-monetary goals, such as growing their user base or increasing process efficiency or business agility. That’s why it makes sense to build flexible models that can measure a range of different business goals.
- Present financial value in a simple-to-understand context
Warren Buffet famously said you should never invest in a business you cannot understand. The same principle holds true when your quantifying business value for your prospects. Too often we see sales teams pull out a sprawling spreadsheet and walk clients through every calculation in it. It’s not long before their eyes start to glaze over.
Sure, you’ll want to be able to show all your assumptions and back up your conclusions with solid math, but you don’t need to start your pitch by diving immediately into the weeds with complex calculations. You might even consider leaving them out of your initial business case.
At the same time, you should make it obvious to your prospect how you came to your results, and make sure you can tie everything back to your product or service. Be able to clearly explain the business drivers behind your calculations—for example, by saving 500 IT people an hour each a month. And if you can’t explain a benefit in plain language, we’d suggest leaving it out of your model altogether.
- Focus on assumptions your client can easily provide
A good business-value model requires data inputs and assumptions that are accurate and believable. The problem is that many clients can’t get their hands on that data. Whether it’s the average cost of a raw material or delays in a business process, many clients can only just guess at the numbers. Pro tip: focus on data that the client can easily produce from their own operations.
What about getting generic values from industry researchers? This can be useful but consider your source. In most cases, the data will be different from company to company, which will have a major impact on the results. Also, don’t try to shoehorn research into a different context to suit your purpose.
BONUS TIP: Don’t forget about the narrative
Putting numbers behind a business value case is one of the best ways to sell your product or service. But your customers have to believe those numbers are real and you can’t do that with numbers alone. Contextualizing your calculations with a powerful narrative will provide the business storyline that will make your value proposition more relevant—and more likely to lead to a successful sale.
Remember, numbers mean very little if you can’t relate them to your prospect’s actual business. Make sure your narrative speaks to the quantification that you’re doing, and don’t waste time quantifying things that aren’t relevant to your story.
Try Mainstay’s Advisor Platform
We hope these common-sense strategies will help you get better at calculating business value for your customer. What’s more, by using a powerful tool like Mainstay’s cloud-based Advisor platform you can build business cases and ROI calculations even faster and scale to equip your entire sales organization for success. To learn more, try our new Advisor value calculator or contact firstname.lastname@example.org
Dan Corcoran, Mainstay’s Chief Technology Officer, is responsible for empowering enterprise technology sellers to message value to their customers more effectively via innovative technology solutions. Dan’s primary focus is on Mainstay’s Advisor solution, a SaaS platform that over 300 businesses like Cisco, Hewlett-Packard Enterprise, Microsoft, Alight and IBM use to help operationalize sales and marketing strategies that orient value messaging to customer-relevant issues.