The most effective way to motivate buyers is to quantify a solution’s value.
While marketing and sales organizations often produce rich content that supports various aspects of the buyer’s journey, they often fail to communicate value as a bottom-line differentiator. When this happens, they lose an important opportunity to persuade buyers and business decision makers.
In order to capitalize on this opportunity, value must be communicated to three distinct audiences: buyers, the buying committee and the finance team. Each group has a unique perspective, and their interests must be clearly addressed by your sales reps.
Here’s where it all starts. Buyers are often the direct users of your solution and need to see how it will save them money and/or grow revenue. You will lose their attention with marketing speak such as “high quality” and “long-lasting,” and with too much emphasis on the latest and greatest feature(s) in your beta release. The fundamental question to be answered is whether the solution can help them do more with less.
Assuming it can, buyers then want to know how much it can help. Quantifying the solution’s value generates excitement and a sense of urgency for its acquisition. This motivates the buyer to move forward with the purchase and sets the stage for requesting approval from the buying committees and finance teams.
The Buying Committee
The buying committee needs clear proof that the solution has both individual and collective benefits. Each group represented on the committee has its own agenda, so it’s important to state the solution’s value in ways that address their individual needs. For example, “Department A can free up three FTEs, Department B can reduce infrastructure costs by $50,000, and Department C can increase sales by $200,000.”
When each stakeholder understands the value proposition, it’s easier for the committee to achieve consensus on a solution. Although we cannot dismiss other issues that must be considered (technology compatibility, requirements match, risk, etc.), a value-based approach is proven to speed up resolution and decision making.
The Finance Team
Budget approval can be the most difficult challenge, even with enthusiastic recommendations from the buyer and buying committee. Larger or more disruptive purchases need approval from a senior finance team or team member. For discussion purposes, let’s call that team or team member the CFO.
The CFO’s role in purchase decisions is to approve projects that offer higher financial returns than other investment opportunities being considered. Buyers and the buying committee must articulate the business case for the desired solution and demonstrate value that extends beyond the interests of the committee.
The key to successful budget approval is to recognize this dynamic and present the CFO with a comprehensive financial analysis. The CFO expects to see the expected total value received, the investment required, the ROI, and the payback period. Other financial metrics such as NPV and IRR may also be helpful.
A value-based approach to budget approval achieves greater success for both buyers and sellers alike. Not only is the price right, but the benefits of the chosen solution are acknowledged to have value throughout the organization.
Done right, no proposal should be met with objections such as, “Your price is too high” or “Call back when my budget is restored.” Focus instead on value, and be prepared to persuade the CFO with a clear, concise and complete financial analysis.