Sell the Problem You Solve, Not the Product You Have

Posted by David Svigel on Jan 11, 2018 11:32:00 AM
David Svigel
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Sell Problem You Solve.jpgI recently spoke with Mike Serulneck, an accomplished Value Engineer who has successfully developed and managed Business Value Engineering and sales proposal teams at Tier 1 technology companies. During our conversation, Mike shared his experience using value selling methodologies to sell technology solutions, as well as his perspective on how value selling has changed over the last decade.

Expect Greater Value

David Svigel: In your experience, what do customers expect these days from value selling methodologies?

Mike Serulneck: Eleven years ago, I had to sell customers on the need for a business case and cost justification. No one was taking this approach, and customers weren’t asking for it. Today it’s expected, especially by large enterprise organizations. And there’s a lot more nuance to value selling beyond financial justification.

When we work with customers that have a mature procurement process, our job is to provide the numbers for their CapEx approval tools and support their standardized methodologies. Companies that don’t have sophisticated processes rely on us for much more. They need us to connect the dots between the pain and the solution, and communicate its value to financial executives so they can understand and score the CapEx proposal highly. They rely on us to provide the business case and often, the proposal format itself.

Customers already know what they want to do, so we’re really not selling them on anything. We use value selling to support their efforts to get budget approval for their project, and providing business insights along the way.

David Svigel: How does your Value Engineering Team use financial analysis to differentiate your solutions? Do you use ROI, TCO, and other tools to do this?

Mike Serulneck: You never want to walk in and say, “Here’s my ROI tool” and start asking for all kinds of information. It can be too complicated for the customer, and may not reflect well on your sales team. Successful practices have to be simple and have an immediate impact, and they have to make everyone’s job easier.

We start by understanding the business challenges they’re facing that require a business partner. We diagnose the problem, and then determine what’s needed to help each audience. We use different value selling tools at each stage of the opportunity. Early on, it could be a feasibility study followed by an actual business case. After the sale, a value realization study could be helpful. It all depends on what works best for them. Phone calls are essential when you’re walking the customer through the deliverable. We also use PowerPoint presentations, proposals, and maybe even a customer visit, if it adds value to the process.

We also try to be respectful of everyone’s time engaged in the project. It’s important to spend more time listening than conducting too many interviews. Long term value is important, but you can differentiate by focusing on immediate needs before you get to far down the road.

Focus on Outcomes

David Svigel: How do you convey the value of the non-financial benefits of technology solutions when decision making often focuses on CapEx and OpEx?

Mike Serulneck: The benefits depend on what kind of technology you’re selling and can include velocity, agility, operations, business performance, employee productivity, and faster time to market. In general, the value model for technology focuses on business and SLA outcomes as well as technology acquisition and people costs (CapEx / OpEx).

Our sales team starts by identifying the outcomes the customer is currently invested in. Then we look at the customer’s “business as usual” processes and how they use their assets and people to achieve those outcomes. Sometimes a customer tells us they’re spending $5 million on technology and asks if we can beat it. That’s a commodities game, and it’s not something we want to play. Instead of comparing my BOM (bill of materials) to their BOM, I compare my outcomes to their outcomes.

The real question is, what would it cost using the customer’s current approach to provisioning to achieve certain SLAs, outcomes, and capabilities? And what would it cost to achieve those same outcomes with our solution? With this kind of comparison, the technology acquisition cost becomes just one in a series of considerations. If the solution doesn’t address business issues and bring the company to an acceptable level of risk, it has no value, regardless of its cost.

Address Need, Benefit, Cost & Risk

David Svigel: What other strategies and methodologies do you use with value selling?

Mike Serulneck: We are Value Engineers. What we sell is the problem we solve, not the product we have. If there’s clarity around the problem to be solved, it’s easy for our value engineers to present various options for achieving business outcomes along with their corresponding costs. And that’s the key: outcomes first, then what it takes to get there. Sell the problem you solve, not the product you have.

The Challenger Sale supports this approach and is closely aligned with business value selling. Value selling covers two of four criteria: benefit and cost. Challenger adds need and risk to the analysis and brings everyone into alignment about the problem. When customers understand the problem, they understand the need. And without a need, there won’t be a deal. We also have to include risk in an ROI analysis and account for it in the proposal. If the proposal is missing information, it will be poorly scored and put at the bottom of the stack.

Every proposal must address need, benefit, cost, and risk, and align to what’s important to every stakeholder. In an enterprise opportunity, we see an average of seven or eight stakeholders on the buying committee. A single blocker reduces the chance for a sale to 50%. If there are two blockers, there’s no chance of the deal going through. You must address any unsolved issues early on by getting alignment around the problem and on the value of solving it. This will double your chances of receiving budget approval. If you wait, there’s no way to craft a proposal that satisfies the entire committee.

Differentiate Using Value Selling

David Svigel: How do you see the future of value selling for technology buyers? What can be done to increase its impact on closing sales?

Mike Serulneck: First and foremost, position yourself as a helpful partner. Remember, you’re not selling a product, you’re selling outcomes. Every project has a sponsor who’s betting their reputation on your ability to make a problem go away. Our job is to give that sponsor confidence in the deal, which is then conveyed to the CFO writing the check. Being a partner means being strategic instead of transactional. That can be a huge shift for sales people, but it’s worth the effort.

In my experience, business value selling is a differentiator. Our customers demand it, and I only see that increasing as we go forward. Every day, we read that the days of the sales person are limited; that customers are smarter and are doing more research on their own. That makes it much more important for us to be valuable to our customers. When we’re strategic, we help our customers make better decisions and see things differently. We help them navigate minefields and give them an experience they don’t have with other vendors. That’s value.

Buyers need help, no matter how much they’ve done before they talk to you. They need help selling the solution internally and getting the job done. They need a partner, not just a quote, and they need someone to help make their job easier. Value selling is a proven way to be strategic and be valuable. Only then will you have a shot to sell what you want to sell.

Conclusion

I agree with Mike that value selling and a strategic, customer-centric approach will lead to greater sales success. I appreciate Mike’s time and willingness to share his unique perspective and the insights he has gleaned from his years of experience as a Value Engineer.

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Topics: B2B Selling, ROI Tools, value selling