Vision Group

Value Proposition for My Prospect

Sept 2008 Newsletter

Why work to establish a value proposition with the prospect?

How do I help the prospect establish a value proposition for my products and services?

Newsletters from The Vision Group

Why work to establish a value proposition
with the prospect?

Have you ever worked with a client to determine if your products and services were the best alternative for the prospect only to find at the end of the buy/sell cycle the client says,

"Thank you for spending the time with me, but, we can't cost justify buying from you!"?

OUTCH!!

My clients tell me that in many cases the reason this has occurred is that the prospect can't determine the value or cost justification of a proposed product or service. To make it worse, after the prospect has spent all of that time looking they may default to the lowest priced vendor or go to a NO DECISION and do nothing.

Below are just a few excerpts from industry organizations that point to the importance of cost justification:

  • A project is 60% more likely to be approved with a cost justification and business case. - Gartner Group
  • More than 82% of IT decisions now require a Cost versus Benefit analysis. - Information Week
  • Return on investment is king, and projects with a quick and clear Cost versus Benefit are much more likely to get funding in today's uncertain business climate. - The Industry Standard
How do I help the prospect establish a value proposition for my products and services?

Value or cost justification is not a broad-brush statement we as sales people make to a prospect or existing client. An example of a statement we could make is, "Our Sales Force Automation system will help you improve forecasting accuracy, saving you thousands of dollars in un-productive manpower."

That may be our opinion, but the only person who can conclude an SFA product will save any money is the prospect or client.

Try another approach to helping your prospect determine value and cost justification:
  1. Understand the prospects goals by asking questions to determine in their words how large (currency - dollars, Euros, Pounds) the goal is today with their current operations. An example of a business goal could be, "I would like to improve forecast accuracy of our sales division by 15% in 2008."
  2. Help the prospect understand how much it is costing them to do things the way they do it today.
  3. During this conversation help determine if there are multiple reasons that prevent them from achieving their goals. Each of those things or reasons may contribute to a portion of the amount that is preventing them from achieving their goals. An example of a reason in this discussion could be, "An opportunity's size and when it will close is the opinion of each of our sales personnel. Because it is their opinion, I cannot place any confidence that the opportunity will close, when it will close, and how large it will be."
  4. Once you help the prospect arrive at the cost of that reason's contribution to the goal, then they are in a position to determine that if they performed those operations in a different manner (with the use of your capability(s), would that cost go down or stay the same.
  5. If you and the prospect determine that if they had certain capabilities there would be a reduction in the variability of the forecast they receive from sales personnel. An example could be, "Would it help if when a sales person completes a prospect call they could update that opportunity with a standardized milestone indicating where in the sell cycle that prospect is, and when the prospect will make a decision?" If the prospect indicates that it would help, then the next question could be, "If you had that capability, how much of the variability in forecasting do you think could be reduced?"

If the prospect agrees to an amount of reduction in forecast variability, and there is a currency amount placed on the change in business operations due to the new capability or manner in business operations, then the value proposition of the capability has tentatively been determined. During the sell cycle this value proposition and other information could be used to cost justify the expenditure they are considering.

In real life, there may be multiple goals, reasons for not achieving them and capabilities that you may help your prospects with. When working with prospects, spend the time needed to determine what their goals are, the reasons that contribute to them not achieving or exceeding those goals, the cost of doing it the way they do it today, and the subsequent changes that would occur with capabilities that you can provide.

If there is a positive value to the change in business operations, the likelihood is much greater that not only will the prospect decide to do something, but, they may do it with you!

Newsletters from The Vision Group

Our focus is on the following key skills of selling and marketing.

The Vision Group Sales Process

  • Successfully executing the Process Steps in a buy/sell cycle

  • Selling Skills - Which skills are needed when?

  • Marketing message  tools and when they should be used

  • Sales Process Deliverables - How do I know the prospect and I are on the same page?

  • Milestones & Probabilities of a sale - How do I know where the prospect is during the sell cycle and when are they ready to buy?

Marketing skills

  • Preparing messages for Discovery conversations that help buyers conclude I may be their best solution

  • Establishing business value for your solutions with prospects early in a sell cycle

  • Determining your company's market positioning so you are asking sales personnel to go where the GOLD is

  • Preparation of your company's Core Marketing Messages and using a Rifle Shot approach

Feel free to forward this e-mail to any associates that you feel could benefit from this type of information.

If you have any ideas or a favorite topic we should write about, drop us a line or give us a call.

Any time you would like to discuss the current selling or marketing situation you are in, please contact us.

Good Selling,

The Vision Group
100 Parkers Lake Rd.
Wayzata, MN 55391
(952)-475-1475

info@visiongroupmn.com

   
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