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What do customers REALLY buy? Improve your sales processes

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by John Fedden and Dr Andy Bass

An extremely successful independent consultant we know (he’s worked with umpteen Fortune 500 companies and drives a Bentley – we think that qualifies by most people’s standards) was talking about the reason most consultants are not as successful as he has been. His explanation is simple, startling, and profound. And it applies to a lot more people than consultants. If you want more sales success, especially if your offering is complex and expensive, it probably applies to you, too.

What he said was this: “People don’t pay for a consultant. They pay for what they and their business will be like when the consultant has finished”.

It sounds obvious. Buyers really want ‘ends’ not ‘means’.

Yet how many consultants bang on about their methodology?

How many IT vendors eulogise about their amazing specifications, and how many lawyers proudly recount the history of their great firm as if these details somehow represent a reason to buy?

Buyers want a return on their investment

Especially when dealing within Business-to-Business markets, people want a return on their investment. A consultant, computer system or well-drafted licence agreement are not a return, they are simply a means to get a return. The only reason the customer is prepared to pay for these things is because of what will happen as a result.

Find out what would be a meaningful ROI (Return-on-Investment) to your customer, and help them understand clearly that your offering provides it, and your sales process will work so much better.

Ultimately when you are selling to senior management, which is after all where the big rewards are, remember that they think differently from lower-level purchasers. They are not just spending the budget they have been allotted, they are looking to make business investments. They want to know when they can expect to recoup that investment, and how much extra they will net thereafter.

ROI is not just a number.

ROI can often be quantified in a number of ways, and that’s a useful thing to do. But beyond that, the power of the approach is more a state of mind. It’s about understanding and communicating the ongoing costs and benefits from a project that involves your solution. Those benefits can be both financial and non-financial:

Financial Returns

• Costs saved
• Additional profit
• Avoided cost
• Reduced time per activity
• Optimised working practice
• Higher quality leading to increased customer commitment
• Lower customer turnover rate

Non-Financial Returns

• Increased reputation
• Better environmental impact
• Reduced stress
• Enhanced customer service

The exact value of these returns depends on the individual customer and what matters to them.

And there’s more. “ROI Selling” allows you to uncover latent issues and information within a customer’s environment that even customer decision makers may not be aware of.

The value of your solution could well have a positive impact in many customer areas. Don’t leave it to your customer to discover this extended value over time. Make them aware of these factors that will, in turn, help drive the purchasing decision.

ROI selling is a very effective way to collect, add-up and present this totaled value to the customer. And by doing this the customer is likely to perceive you very differently, allowing you to evolve from just another salesperson into the role of a trusted advisor.

Work together to prove the value

With ROI Selling you encourage customers to partner with you in order to prove the value of your solution. Your customers can then advance to a decision making level with a compelling reason to buy - and buy now. Remember this ROI Selling fundamental - “Why do people buy?” is more important than “How do I sell?”

Here are five things you can do to get an ROI ‘feel’ to your sales process in the next 30 days;

1. Take your best customers to lunch and discuss the concept

Tell them that you are looking for new ways to add value and ask if you can run this idea by them? Ask what kinds of return would they find compelling.

Particularly within the corporate sector, many organisations will already have investment Hurdle Rates: investment criteria where financial investment calculations (ROI, NPV, IRR, EVA) are used to determine which potential investments in a solution or service are sanctioned and which are rejected.

In fact, if you want to go the extra mile, you can call your customer’s finance department and ask them what financial calculations they use as part of their investment decision-making criteria. You may be surprised at just how helpful a response you’ll get.

2. Play the ‘so what?’ game to understand a customer's perspective

Get together with a colleague or other sounding board and take a feature of your product or service. Person A puts forward the feature: “This product has/does X”. Person B, acting as though they were the little voice in the customer’s head, says “So what?”.

Person A comes up with some reason why X is a useful feature. Person B asks “So what?” again. Continue the process until you are naming compelling high value results of having the product or service, and not just technical features (Leave that mistake to the geeks: remember buyers respond to the WIFM factor – what’s in it for me!).

3. Make the benefits measurable and quantifiable

Write down the top five sales benefits associated with your solution. Now ensure that each of these benefits is both Measurable and Quantifiable.

It’s Measurable if you can show how far it takes the customer away from a source of pain (e.g. removal of need to increase operational costs) or towards a gain (e.g. provide the customer with a way to generate additional revenue). It’s Quantifiable, if you can express this result numerically

4. Target those with the most to gain (or lose)

Taking each of your top five sales benefits individually, identify the real customer stakeholders most associated with each benefit by asking yourself two questions:

• Who, within the customer organisation, has the most to lose from this business benefit not being realised?
• Who, within the customer organisation, has the most to gain from the realisation of this benefit?

Now make sure that both you and your salespeople are selling to the right people within the customer accounts you target!

5. Focus on the big hidden competitor - the customer’s status quo

From talking to hundreds of salespeople both here in the UK and in the United States, we find that often salespeople lose out not to the competition, but due to the customer not reaching a point where a decision is made - consequently the project gets shelved.

This is because the customer doesn’t know what status quo is costing them (i.e. the cost of their current situation). By helping your prospect understand the cost of doing nothing, you are cutting the odds of losing to a ‘No’ decision.

The salesperson that knows the cost to the customer of doing nothing is way ahead of the game. Now start designing a set of questions that will help your customers understand the true cost of doing nothing!

Adopting these techniques may not ensure that you can buy a new Bentley next month, but they will help you meet your sales target, and that’s a great step in the right direction!

About The Authors
The authors of this article, John Fedden and Dr Andy Bass, provide a free-of-charge one-hour workshop on the subject of ROI Selling. To find out more, please send an email to ROItalk@salesfactory.co.uk.

John Fedden is Managing Director of Sales Factory Limited, Dr Andy Bass is Managing Director of BassClusker Consulting

Posted November 20, 2006

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