Today’s New York Times had an article: The Secret to Start-Up Success: Save Customers Money. My knee jerk reaction was D-uuuhhh.
Then I paused to think, while this is so obvious, how many sales people really demonstrate how they can save their customers money? I thought I would pose a few questions, I’d love your responses:
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Do you, in every proposal, present a written and compelling business case about how your solution will save the customer money?
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Do you review this with your customers and get their buy in?
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Are your customers demanding this business case? Do you provide it even if they don’t ask?
In one of my companies, we are evaluating some new software tools. We are reviewing proposals from a number of suppliers—some very large companies. I saw the first proposals a couple of days ago. While all of the “boilerplate” in these proposals talks to increase in productivity, areas where we can realize savings, and other benefits, none of the vendors provided a business justification and analysis. In the presentations, the sales people are giving lip service to productivity and value, but focus mostly on the neat features and capabilities. Part of the fault is with my team, they did not ask for a detailed business justification. However, shouldn’t the sales person be providing this as part of the value proposition and in demonstrating why we should be buying their solution?
This caused me to reflect on other situations where we have made major purchases. It caused me to think to some the reviews we do for our clients. While everyone presents good analysis of the costs of procuring a solution, and they provide comprehensive financing alternatives, very few of the deals included a comprehensive business case, justifying the solution.
The secret to success is demonstrating visibly, using your customers’ financial criteria, how you can save them money. Perhaps it’s too obvious and simple. What are your thoughts?
Dave,
This is soooo true.
Yes it might sound obvious, but the truth is that few of us actually engage with prospects in a meaningful way.
Salespeople will often talk about savings in a general sense, when what’s required to be effective is specific language and figures. This as you point out requires planning.
If its specific and clear, you get customer buy in. If its hazy and general, well?
Great Post.
Niall
Niall, thanks for the note. I think too often, sales people talk about potential savings or areas of benefit.
Customers respond to “we can save you $XX Millions, because of…..”
Thanks for the comment. Regards, Dave
Thought provoking as always Dave!
Is it true that a product that provides value, or is worth having, saves money?
I totally take your point that if a product does save money then we should highlight that saving, but to me this forms only one section of the proposition.
It might be the key point for the prospect, and in those cases (as was the case for you) I 100% agree…why hasn’t the salesperson’s proposition covered that!!
On the flipside, in my opinion many sales people focus too much on the money element, which in my experience often starts to focus the conversation on price (very different from saving/value I know, and obviously incorrect – but it does happen!)
Example: If selling a product which competes on quality over price, then performance or functionality could be the issue/driver for purchasing.
So my addition is:
How important is cost saving to the buyer?
Does your product focus on saving?
How easy is it to demonstrate that saving? (ease = clarity; clarity = sales)
Is that saving the thing that will win you the sale?
In the example you have quoted I would say the criteria in the above 4 questions are fulfilled, and that those salespeople DID miss those opportunities – definitely!
I also agree with Niall; for each product & buyer we must engage meaningfully (is that a word?!)
However is saving money the only meaningful way to engage, or is it just one of the things that needs consideration in each proposition?
Steve, you make some very great point–taking the conversation far beyond my original intent with this post. A few thoughts:
1. For the moment, arguing the “save the customer money” point, the costs I allude to have little to do with the price of what we are selling. If the product is competing on quality, performance, or functionality, we probably have an impact on the productivity and efficiency of the customer—which is saving them money. For example, if the performance of a product increases their productivity by 25%, there is an cost argument (savings, avoidance, etc.). If the product we are selling enables them to bring some of their products to market, we save opportunity costs. We need to look at costs, not from our point of view, but from the broadest view of the customer.
2. I would tend to add on the the “save them money” with a “help them make money,” translated into, helping them create revenue through identifying new opportunities.
3. There are a whole bunch of things that we should look to helping customers do: Make money, save money, improve quality, improve customer sat, improve customer retention/acquisition, increase share…… Generally, those can be translated into revenue and expense terms. To some degree, I was firing for effect. I think too often, sales people don’t do enough in helping customers identify the impact of the product/service on their company. Too often, we present features, advantages, benefits—leaving the customer to translate it into dollar and cents (or pounds and pence for you).
Your comments are great and address much broadrer issues. I really appreciate your discussion.
I know you have some comments on my points – look forward to seeing them! 😉