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Engineering Value In the Sales CycleWEBINAR
featuring
Jim Ninivaggi
Service Director, SiriusDecisions
Tim Braman
VP, Revegy
© 2014 SiriusDecisions. All Rights Reserved 2
You Win Some. You Luge Some.
To have velocity at the finish…
… you need to build it from the start.
SiriusPerspective: If you have not engineered value throughout the sales process, you will be forced to sell on price at the end.
Maybe It’s Not A Problem Closing
My reps need closing skills
© 2014 SiriusDecisions. All Rights Reserved 4
Why to sell value
P&L
Reduce Sales
Expense 5%
Increase Sales
Volume 5%
Decrease
Discount 5%
Sales 100.0 100.0 105.0 105.0
Cost of Goods 60.0 60.0 63.0 60.0
Gross Profit 40.0 40.0 42.0 45.0
Fixed Costs 13.0 13.0 13.0 13.0
General & Admin.
11.0 11.0 11.0 11.0
Sales Expenses 6.0 5.7 6.0 6.0
Profit Before Tax 10.0 10.3 12.0 15.0
Profit Increase
3.0% 20.0% 50.0%Harvard Business School Publication #9-192-09
© 2014 SiriusDecisions. All Rights Reserved 5
Discussion Overview
•Key Issues We See:• Sales organizations efforts in transforming their sales
organizations are stalling• Selling value needs to happen throughout the buyer’s journey• In absence of value, reps are forced to negotiate on price
•What You Will Walk Away With:• An understanding of the changing buyer’s journey• A road map on the changing conversations your reps need to
have to engineer value • How to leverage technology to enable this change
The Changing Buyer’s Journey
© 2014 SiriusDecisions. All Rights Reserved 7
More Than Ever: Understand the Buying Process
Solution Vendor SelectionEducation
Loosening of the Status
Quo
Committing to
Change
Exploring Possible Solutions
Committing to a
Solution
Justifying the
Decision
Making the
Selection
SiriusPerspective: By the time a rep first meets with a buyer, need may be preordained and a solution preconceived.
Preordained Need/Preconceived Solution
8
While most marketing and sales organizations
have recognized this seismic shift, many have done little to
adjust.
Need and
SolutionWeb sites Blogs
Changing the Conversations Sellers are Having With Their Buyers
SiriusPerspective: Moving from product to solutions will require a different set of competencies.
The Product to Solution Evolution
PRODUCT SOLUTION
© 2014 SiriusDecisions. All Rights Reserved 11
Most Prominent Inhibitors to Sales Achieving Quota
11
Insufficient Leads
Poor Sales Skills
Too Many Products to Know
Information Gap (Industry, Solution, Etc.)
Inability to Communicate Value Messages
26.0%
24.3%
21.4%
16.0%
13.3%
SiriusPerspective: Relationships don’t matter to CXOs as much as company and industry insight.
What Does a CXO Want From A Salesperson?
12
4x
Cultivate a personal relationship with me
2XDemonstrate deep expertise about my companyShow they care
about my success
Share insightsabout my industry
© 2014 SiriusDecisions. All Rights Reserved 13
We Asked Salespeople What’s Changed?
1. Buyers are more informed• Access to Content• Peer Network• Access to Data
2.Buyers need more (and earlier) ROI• Reason to Change• Peer Examples• Executive Support
3.Buyers are less likely to engage earlier• Self Service• Network Introduction• Events Not Working
© 2014 SiriusDecisions. All Rights Reserved 14
Diametrically Opposed Forces
14
Transactional
Buyers
Reps Told to Sell
Solutions
© 2014 SiriusDecisions. All Rights Reserved 16
Three Key Roles Salespeople Must Play
• Knowledge of products, customers, industry issues, financial acumen, best practices, etc.
• Critical early in process
Domain Expert
• Aligning internal resources with customer resources efficiently and effectively
• Critical in middle of process
Strategic Orchestrato
r• Demonstrate that potential risks are
outweighed by potential rewards, using proof sources and quantification when needed
• Critical later in the process
Risk Alleviator
Organizational Requirements
© 2014 SiriusDecisions. All Rights Reserved 18
Observable Outcomes
Customer Buying CycleExplore Options/Refine Requirements
Loosening of Status Quo
Needs Recognize/Commitment to Change
Evaluate OptionsRequirements Defined
Implement & Evaluate
Justification of Decision/Validate
Negotiate & Sign Contract
• Conducts thorough Discovery analysis, Monetizes problem of status quo
• Content and tools
• Solution shipped to customer
• Develop and maintain relations with decision makers and influencers
• Content and tools
• Requests meeting with customer
• Content and tools
• Shares business case for change away from status quo
• Content and tools
• Tailored Solution Demo provided to all necessary Stakeholders, awaiting decision from customer that we are the preferred choice
• Content and tools
• Final proposal and terms provided to Key Stakeholders
• Content and tools
• Contract prepared & delivered to customer
• Value Actualization• Contract delivered
for processing -Finalize any requirements for processing
• Content and tools
1. Needs Exploration
2. Needs Developed/Identified/Agreed
3. Solution Development
4. Solution Accepted
5. Final Terms & Conditions
6. Contract Submitted
7. Value Actualized
Sales Process
Sales Stages
5% 10% 25% 50% 75% 90% 100%
Observable Outcomee.g. web activity
Observable Outcomee.g. email confirmation of needs/scope and timeframe
Observable Outcomee.g. Solution Map document agreed upon
Observable Outcomee.g. email confirmation that solutions is in alignment
Observable Outcomee.g. Access to economic decision makerhas occurred
Observable Outcomee.g. Contract signed
© 2014 SiriusDecisions. All Rights Reserved 19
The 7 Points where Value Leaks
Customer Buying CycleExplore Options/Refine Requirements
Loosening of Status Quo
Needs Recognize/Commitment to Change
Evaluate OptionsRequirements Defined
Implement & Evaluate
Justification of Decision/Validate
Negotiate & Sign Contract
• Conducts thorough Discovery analysis, Monetizes problem of status quo
• Content and tools
• Solution shipped to customer
• Develop and maintain relations with decision makers and influencers
• Content and tools
• Requests meeting with customer
• Content and tools
• Shares business case for change away from status quo
• Content and tools
• Tailored Solution Demo provided to all necessary Stakeholders, awaiting decision from customer that we are the preferred choice
• Content and tools
• Final proposal and terms provided to Key Stakeholders
• Content and tools
• Contract prepared & delivered to customer
• Value Actualization• Contract delivered
for processing -Finalize any requirements for processing
• Content and tools
1. Needs Exploration
2. Needs Developed/Identified/Agreed
3. Solution Development
4. Solution Accepted
5. Final Terms & Conditions
6. Contract Submitted
7. Value Actualized
Sales Process
Sales Stages
5% 10% 25% 50% 75% 90% 100%
Risk:• Low value business caseEffective Practice:• Provocation/Insight into value
achieved by peers
Risk:• Volunteering to discount earlyEffective Practice:• Lead with Value/ROI justification
Risk:• “Market Price” too lowEffective Practice:• Capture Additional value areas
from Key Stakeholder Discovery
Risk:• Your solution looks like everyone
else’sEffective Practice:• Deep Discovery to highlight your
Unique Value in Customers terms
Risk:• C-Suite PushbackEffective Practice:• Link ROI to Customers’
Strategy/Risks
Risk:• Procurement ‘Your Price is too
high!”• Nibbled to death by RabbitsEffective Practice:• Negotiate once and with a plan
Risk:• Next deal wants the ”special”
customer priceEffective Practice:• Measure the actual value
delivered
© 2014 SiriusDecisions. All Rights Reserved 20
Guide your sales teams through the process
© 2014 SiriusDecisions. All Rights Reserved 21
Mapping Sales Productivity
21
CoreSellingActivities
Non-CoreActivities
Internal Direct Engagement
(expense reports, travel)
BLACK HOLE
(customer service calls)
RELATIONSHIP
(research, proposals)
ENABLEMENT
(prospecting, sales calls)
ENGAGEMENT
© 2014 SiriusDecisions. All Rights Reserved 23
Buyer Need DefinitionBuild Out Conversation Templates
.
© 2014 SiriusDecisions. All Rights Reserved 24
Buyer Need Definition
Initiatives
Challenges
Job Role
Buying Role
Common Titles
SiriusDecisions Persona Template
© 2014 SiriusDecisions. All Rights Reserved 25
Create the Persona Map in Salesforce.com
25
© 2014 SiriusDecisions. All Rights Reserved 27
Prepare Your Reps For Every Conversation
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Value-Selling Best Practices
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Effective Practice #1: Know Your Ideal Customer Profile
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Lead Score
Pro
spect
Fit
Effective Practice #1: Know Your Ideal Customer Profile
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Effective Practice #2: Don’t Chase the ‘Unwinnable Deal’
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Effective Practice #2: Don’t Chase the ‘Unwinnable Deal’
COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL
Customer Buying CycleExplore Options/Refine Requirements
Loosening of Status Quo
Needs Recognize/Commitment to Change
Evaluate OptionsRequirements Defined
Implement & EvaluateJustification of Decision/Validate
Negotiate & Sign Contract
Effective Practice 3: Coach the Deal
Right Deal?
Do we understandthe Business Need?
1. Needs Exploration
2. Needs Developed/Identified/Agreed
3. Solution Development
4. Solution Accepted
5. Final Terms & Conditions
6. Contract Submitted
7. Value Actualized
Sales Process
Does the Business NeedJustify the investment?
What is our Give/GetNegotiating Plan?
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Effective Practice 3: Coach the Deal
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Effective Practice 4: Does each stakeholder see the value?
✔ ✔
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© 2014 SiriusDecisions. All Rights Reserved 37
Key Take Aways
•Reps must look to build the “case for value” throughout the sales cycle.
•Be sure to provide the infrastructure and support your reps need.
•Ultimately, every sales comes down to a series of conversations.
COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL
Jim NinivaggiService DirectorJim.ninivaggi@siriusdecisions.comSiriusDecisionswww.siriusdecisions.com
Tim BramanVP Corporate [email protected]
Questions?