Global R&D spend has tripled in real terms over the past 30 years, reaching $2.5t in 2022, with hardware technology, healthcare, and software the largest drivers by vertical. Despite this ever-increasing investment in innovation, B2B marketing and sales teams often fail to quantify and communicate the resulting competitive differentiation to the customer. As a result, too many B2B opportunities die on the vine, with sales reps routinely citing price as the reason the deal went dark or was lost – either to a competitor or a status quo solution.
Earlier, we explored how a win-loss framework centered on customer value can systematically capture data points that help sales gain an enhanced understanding of why deals are lost – beyond simply “price.” By fusing traditional win-loss metrics, such as firmographic and competitive data, with data points that illuminate when and how value was utilized, marketing and sales teams can uncover insights that allow them to tailor their approach to future sales conversations where they are up against either the status quo or competing vendors.
Well-designed value propositions are the single best way for marketing and sales to highlight differentiation, communicate outcomes, and paint a compelling story of “why change” and “why us.” Making customer-specific value central to commercial efforts is both a) within the direct control of sales and marketing teams and b) has the potential to produce an array of benefits – increased number of qualified leads, improved win rates, higher average deal size, and reduced sales cycle time. There are two primary ways that refined value propositions positively impact B2B sales velocity by reducing the number of deals lost due to price:
- Focusing sales resources on the right stakeholders at the right accounts. A quality B2B value proposition helps product and marketing teams better understand audiences and segments where they are particularly well-positioned, and sales immediately contextualize the solution’s economic benefit to these targeted personae during the first sales call. This is useful in shaping an ideal customer profile (ICP), building out audiences for account-based marketing campaigns and targeted sales prospecting, qualifying out opportinies, and determining which early-stage deals should be prioritized. The net result is a funnel full of better-qualified leads more likely to close.
-
- Sales Velocity Impacts: Increased Number of Qualified Leads, Improved Win Rates
-
- Enabling more effective value conversations with B2B buyers. Once an account is qualified, sales teams must navigate a sales process that includes an array of stakeholders – sponsors, frontline users, senior decision makers, and finance/procurement. Great value conversations are interactive and tailored to the specific account and industry. When done correctly, they accelerate the sales process by centering conversations on outcomes and financial value delivered.
-
- Sales Velocity Impacts: Improved Win Rates, Higher Average Prices, Reduced Sales Cycle Time
-
Next, we will explore how value can be used to better qualify and progress opportunities in scenarios where B2B sellers are losing to “do nothing” buyers. In our final entry, we will explore the ways these same levers can boost sales velocity in competitive selling situations.
Using Value to Overcome the Status Quo
Time is the ultimate non-renewable resource. Nowhere is this more true than in B2B sales. Building and managing a healthy sales pipeline often boils down to optimally deploying time and resources. This is true at both the individual rep level and across sales teams and organizations, and includes considerations such as which deals to prioritize, whether or not to prospect vs. progress mid-funnel deals in a given hour, where to apply extra marketing and presales resources, and when (if ever) should extra incentives be applied to get a deal over the line.
Viewed in this light, expending time and energy spent chasing deals they are unlikely to close can quickly become a major drag on sales team performance. Between 40-60% of deals are lost to customers who express their intent to purchase, but fail to act.
For this reason, B2B sales teams looking to streamline and improve their pipeline should look first at the large cohort of opportunities that are stalled due to no decision. By beginning to communicate the differentiated value of their innovative solution and presenting it in terms of financial outcomes, B2B sales can impact sales velocity by filtering out and overcoming the following causes of buyer inaction:
- Lack of serious purchasing intent: Too often, a seemingly strong first call that fails to progress because the buyer lacks a real intent to buy. A focus on features and user benefits that appeal to the initial contact may be disconnected from the company’s strategic objectives. A lead may be seeking column fodder as a box to check for an upcoming renewal, or more commonly, express sticker shock when presented with the cost of the solution. Leading with value helps B2B sellers flush price buyers, tire kickers, and other unserious buyers out of the pipeline while engaging and progressing prospects that the value message resonates with.
-
- Sales velocity impact: increased number of qualified leads
-
- Lack of internal influence: Getting to senior decision makers is an important inflexion point in any deal lifecycle. However, this is easier said than done. In addition to being hard to reach, too many salespeople fail to successfully persuade them once a meeting is obtained. 82% of B2B decisionmakers believe sales reps are unprepared to effectively engage with customers. The senior leaders want to know how your solution will impact their business. B2B salespeople need to convey a strong economic argument to buy in their limited window of opportunity. Value propositions can help sales paint a vision of value by collaborating with members of a purchasing committee on a shared business case tailored to their specific organization, fast-tracking decisionmaker access and signoff.
-
- Sales velocity impact: increased number of qualified leads, improved win rates, decreased sales cycle time
-
- Lack of strategic vision: An otherwise qualified buyer may have a strong idea of their own challenges or pains, but struggle with envisioning anything outside the current incumbent process. This is acutely challenging for teams selling innovative solutions designed to replace well-worn approaches. Overcoming the inertia of legacy systems and processes requires courage on the part of the buyer, which can be supported by a value proposition designed to instill a “why change?” message. Often, this can be the final nudge that gives the initial contact confidence to bring the proposal forward to the broader team. In addition, research has shown that the ability to marry customer needs with a strongly recommended solution is a trait that can nearly double close rates versus simply diagnosing the need. Advanced value propositions can be utilized to identify specific packages and/or solution configurations that fit buyer needs, which can in turn lead to increased deal sizes.
-
- Sales velocity impact: increased number of qualified leads, improved win rates, higher average prices
-
- Lack of trust in vendor’s ability to deliver: As the adage goes “nobody ever got fired for buying IBM.” B2B buyers, particularly ones making sizable investment decisions, not only want to see that your solution is capable of delivering on their promises, but can also prove that they have delivered for customers like them. Well-designed value stories are tailored to the customer’s business and industry, prominently feature value drivers specific to the buyer’s needs, and are oriented around the hard outcomes they have delivered for similar customers. By wrapping that information in an interactive format presented in the customer’s language, B2B sales can foster trust and instill confidence from the very first meeting. This focus on value delivered can also disarm the price question by presenting it in the context of the overall economic value.
-
- Sales velocity impact: increased number of qualified leads, improved win rates, reduced sales cycle time.
-
Status quo bias is hard to overcome, and can manifest itself in one or more of the above ways. For B2B sales teams that report a high volume of lost deals to “no decision” or incumbent solutions/processes, the ability to use value early on to target buying profiles and accounts has a number of sales velocity impacts. Keen readers will notice the common thread across each source of buyer inaction is the increased number of qualified leads. This is because value is particularly effective at identifying the customers most likely to advance to decision-makers’ desk, and eventually purchase.
By applying the “value razor” to the top of the sales funnel, B2B commercial teams can not only qualify out unlikely buyers, but also nudge otherwise qualified opportunities to overcome initial reticence on the part of buying committee members, which can serve to increase win rates, grow average deal size, and reduce sales cycle time.
