Mass High Tech, May 16, 2005

Seal the deal with the right stuff
By Barbara Bix

Recently, five companies that had seen his company’s “point solution” at a health care industry trade show called the owner of a small software company to schedule a demo.

Some of the original callers were decision-makers. The others were technical advisors. All were impressed with what they saw and scheduled follow-up demos for their counterparts — who also waxed enthusiastic about the product. Yet six months later, four of the five had not signed purchase orders, despite the fact that they continue to express interest in the product.

Does this scenario sound familiar? Do you have prospective buyers who clearly need your product or service yet either delay purchasing or fail to purchase at all? If so, there’s a reason. Moreover, until you find out what it is — and address the concern — you’ll continue to miss revenue opportunities.

Everyone is busy. In fact, most people are too busy to get around to the things they know they have to do, let alone the things that they’d like to do. Unfortunately, what this means is meeting an important — and even recognized need — is insufficient. You have to convince prospective buyers that they cannot afford to delay purchasing.

Marketers refer to this process as developing a compelling value proposition. A compelling value proposition captures buyers’ attention. It also removes sales obstacles. Done successfully, a strong value proposition makes it so easy to buy that people don’t hesitate to do so.

Here’s information that you can use to turn your product or service from a “so what?” to a “must-have.”

Beauty is in the eye of the beholder. The best place to start is viewing your product or service through the buyers’ eyes. The only truly effective way is to ask them directly. That’s because subtleties — and variations — in how people buy can make or break a sale. If you think you can bypass this step because you know how your customers think, try this simple step. Ask your current customers why they chose your services.

The answers, although seemingly similar, will be all over the map. As you anticipated, some will praise the unique qualities of your product or service. For most, however, other factors will have come into play. One may mention timing. Another may cite responsiveness. For still others, a recommendation from a trusted source may have clinched the deal. To develop a compelling value proposition, you need all this information.

Not all buyers are created equal. If everyone’s needs are different, then chances are it will prove impossible to develop a single value proposition that all your buyers will find compelling. The key is to focus on the buyers that your company most wants to attract. Depending on your business objectives, these “ideal prospects” may encompass companies that buy quickly, those that are willing to pay top dollar or marquee accounts that will attract press coverage and therefore additional business.

No man is an island. Once you’ve decided which companies to target, finding out how they make purchasing decisions is essential. Whether formal or informal, every company has a buying process. While one person generally plays a pivotal role, there are often other stakeholders who influence the decision. Each has unique evaluation criteria.

Technicians will also want to understand how the product works. Financial buyers tend to seek evidence that the company will receive a good return on the investment or a rapid payback. Operations personnel look for assurances the product will be easy to use and maintain. Failure to address any stakeholder’s concern can delay or prevent the sale.

Showing works better than telling. An effective value proposition must do more than just meet stakeholders’ evaluation criteria. It must persuade each that his or her situation will materially improve as a result of the purchase. It also helps to reduce buyers’ perceptions of risk. One way to reduce buyers’ perception of risk is to give them the opportunity to experience the benefits they will derive when they purchase.

This strategy works best for products or services that users can easily test before buying. If your product or service requires a lot of setup or training — or it will take time for users to start experiencing benefits — you may want to consider other approaches.

Another way to reduce buyers’ concerns about risk is by helping them quantify the benefits that they can expect. Many sellers have developed “ROI calculators” for this express purpose. These tools ask users to answer a series of questions that help them model anticipated savings or revenue increases. Calculating hard savings, using the buyers’ own data — and assumptions that they can review — is much more persuasive than just generally stating the same benefits.

Straight from the horse’s mouth. Another way to help buyers anticipate the benefits they will derive is to present them with examples of your satisfied customers’ experiences. Two common marketing programs that accomplish this objective are customer case studies and customer testimonials. Case studies relate stories about client successes. Customer testimonials are abbreviated versions of case studies and take the form of quotations. In a sentence or two, the customer praises your company’s product and describes specifics of the benefits that he or she has experienced.

Stories from identified sources are more credible. The most effective case studies and testimonials cite customers’ names and companies. Especially when they are well-known, your company benefits from the association between your product and your customers’ brands.

Don’t keep secrets. Developing a great value proposition that effectively addresses stakeholders’ concerns is a good beginning. The next step is making sure prospective buyers know what you know. Too often, the most important aspects of products or services are well-kept secrets.

First, check to make sure all your marketing collateral — your websites, brochures and presentations — clearly and consistently communicate the value that you deliver. But don’t stop there. Make sure prospective buyers will encounter your messages wherever they go.

Find out how your customers heard about your products, what meetings they regularly attend and about the publications they read. Since buyers don’t always have time to dedicate to researching your product or service, it’s important they hear about the value of your products and services wherever they go, from those they trust.

In today’s hectic world, capturing buyers’ attention requires much more than building a better mousetrap. Understanding — and acting on — what creates value for each person involved in the purchasing decision is essential to winning the business.