Use Value to Stop Losing Deals
Brent Ross is Customer Success Manager at Ibbaka. See his skill profile here.
5 Reasons B2B Sales Teams Lose Deals, and How Value-Based Selling Can Help
Losing sales deals at a higher than expected rate can be a difficult problem to grapple with and diagnose. Poor sales performance on new and existing innovations isn’t just disappointing because of its impacts to revenue, it’s hard on everyone that has contributed their passion and energy to bring that product into the light of day.
But fixing poor sales or pricing performance doesn’t have to be hard! Many of these challenges ultimately are centered around understanding the customers biggest pains, and the real value of solving those problems. In this article, we help you take a methodical look at why sales teams lose deals and what to do about it.
Reasons Sales Teams Lose Deals
Here are some of the reasons we hear as frequent culprits for lost deals. All of them play a role in your team’s ability to focus their pitch on value.
Poor Process - managing everything from consistent handoffs between teams (and transferring knowledge of your customer) to making sure sales people aren’t getting bogged down in tech and non-revenue generating activities is key to putting the buyer at the center of the experience. The easier and faster it is for customers to help pre-sales support and others understand the problem to be solved, the better.
Not Creating a Business Case Specific to Your Customer - In our research for customers, we demonstrate time and time again that different customers derive value from products in different ways. The same feature set can deliver a benefit that will be weighted more heavily by some customers than by others. So sales teams need a way of consistently uncovering the value drivers that will be most important to customers.
Not Justifying Price - Sales teams that can’t quantify the specific value that any one customer cares about the most are likely to have a harder time justifying their price and winning deals. Particularly if your solution is one of the more expensive solutions in the market.
Not Understanding the Decision Makers’ Pain - Organizations may have an overarching problem that your solution can address, but undoubtedly that problem affects different stakeholders in different ways. Understanding who is at the table and their primary concerns will help you tailor your pitch.In a recent conversation with a software buyer, the person I was speaking with told me that being able to go to her CEO and tell him that spending money on x solution was going to stave off the need to hire another FTE for up to another whole year was a deal closer.
Not Providing Proof of Value - This one comes up over and over again in the sea of advice we see on this topic, and there are many ways to do it - case studies, customer references, and value or ROI calculators can all help, but if the customer has to work too hard to follow your bread crumb trail of proof of value, your deal will be at risk.
Ways to improve your win rate
Discover and Communicate Value Throughout the Sales Process
Anchoring your discovery calls to customer goals and problems they are trying to solve, and documenting these points aren’t just a way to ensure solid handoffs or making sales and sales support teams are aligned. These conversations should also help you uncover the value your customers are trying to get with your solution so that you can refine an existing value model, or build one if you don’t have one already. Many companies already have a wealth of this data to work with.
The end result of analyzing that data should be a series of value drivers - things like specific types of cost savings,
Build a value model
A value model is a formal representation of the value provided to a customer (or customer segment or persona) relative to an alternative. A good value model is able to quantify value and connect it to the customer’s ground truth. This means a few things:
The value model includes equations that allow you to calculate the value that will be realized by any one customer, based on their circumstances
You cannot build a value model without discussing it and validating it with customers
A value model will allow you to create value metrics, which are a key input to value-based pricing. For a good introduction to value models, read ‘A Value Model Will Change Your Business’ on this blog.
Ibbaka Valio Value Model - LEARN MORE
Connect your pricing model to value
Once you have value metrics, you can use these to identify the pricing metrics that make the most sense for your pricing model. Tiers, fences and pricing in your model all help to communicate the value of what you are offering. For an introduction to value-based pricing, read, ‘What is Value Based Pricing’ on this blog.
Tailor the business case - quantifying value that your customer cares about will help justify your price
The value model you design has to be usable by everyone who is customer facing and who is responsible for selling, upselling or cross-selling. If your frontline teams can quantify the value any one customer will receive based on the value-drivers that are most relevant to them, you have a better chance of winning those deals.
This includes making sure that the value you quantify can be easily communicated and addresses the needs of the most important stakeholders in the buying process.
Tell stories that matter to your customers
Selling a product isn’t just the story about how your customer will benefit. There needs to be compelling proof that it’s worked for customers like them, in the form of case studies, testimonials and specific examples that match their business model and environment. In our market research for clients, we hear about sales teams losing deals because they weren’t able to give examples of existing customers who were of a similar size with similar challenges to their own. Do your homework and be ready with those examples.
Provide proof of value throughout the customer lifecycle
Providing proof of value doesn’t stop with closing the first deal. Make sure your customer success teams can use your value model to do an ongoing validation of value throughout the life of the contract. If you can validate the total contract payback for your customers, even better!
How Ibbaka Valio helps you sell using value
Ibbaka Valio puts value models into action by helping sales and customer success teams present the value story to your customer that’s going to matter most. Ibbaka can help you build your value model, as well as help you create and execute pricing that communicates the value of your product. To get started with a conversation, contact us.
