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Challenges of B2B Sales: How Value Propositions Can Address the 4 C’s

June 4, 2015

Posted by Peyton Marshall

Posted in Empower Sales Conversations, Improve New Product Launch, Increase B2B Sales, Presales, Product Management, Product Marketing, Quantify Customer Value, Sales, User Content, Why LeveragePoint?

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Hitting B2B sales and profitability targets is not getting any easier.

As sales cycles lengthen, conversion rates drop and sales teams close unprofitable deals, diagnosing the underlying causes and taking steps to address them is crucial for Sales Management. For differentiated B2B products and solutions, selling Customer Value improves sales performance.

4 Challenges of B2B Sales. B2B sales teams invariably need to grapple with the 4 C’s:

  • Customer Connection
  • Commoditization
  • Customer Consensus
  • Complexity

Good Value Propositions articulate the two to four things that make you better than the competition and quantify what they’re worth. Let’s look at each of the 4 C’s in turn and how Value Propositions can address them.

1. Customer Connection. Online content, well-designed websites and e-mail marketing continue to improve the information available to buyers. Better information and better customer search habits often delay human contact and human connections between customers and vendor sales. CEB data indicate that buyers are 57% of the way through their buying decision before contacting a sales rep. Decision makers are well protected by gate keepers. Deals turn into sales fire drills when a newly contacted customer is discovered to be on the verge of making a decision.

Whether or not early access to customer decision-makers is the problem, buyer executives are very clear that the average sales rep that they connect with is ineffective. A recent survey of buyer executives conducted by Forrester showed that vendor sales people scored well in terms of how knowledgeable they are about their own company and their own products.

But vendor sales reps scored badly with buyer executives in terms of their understanding of the customer, the customer’s business and how they can help the customer. The buyer executives polled by Forrester indicated that only 12% of sales calls added value. B2B sales reps are challenged in making meaningful connections with their customers.

Value Selling helps to improve customer connection. Value Propositions are inherently customer-centric. They quantify the benefit of a product or solution and measure that benefit in terms of its impact on the customer’s profitability and business success. A strong summary value message used early in the sales cycle can speed up access to decision-makers and recommenders. Discussions of the customer’s business, assumptions and how value is created engage the customer and get them talking.

Conversations that tailor and customize a Value Proposition to customer specifics are collaborative in nature, building trust in a relationship as a customer suggests changes to assumptions and validates a rep’s assertion of the value created. A value conversation entices a customer to work in partnership with sales to reach an endpoint of quantified customer success. Value Propositions accelerate and improve customer connection.

2. Commoditization. Buyer perceptions matter. In the absence of great messaging well communicated, the most differentiated product or solution will be perceived as a commodity. In a recent survey of field sales and sales management professionals by the Aberdeen Group, the number one need that was expressed by participants was “to improve positioning and differentiation in messaging and sales presentations to tell a better, unique story.”

Good Value Propositions highlight product differentiation as the source of quantified Customer Value. A good quantified value message focuses on how a product is better and what that is worth to the customer. This transforms the focal point of a discussion to a conversation about value instead of about price. The value conversation helps to identify the points of differentiation that resonate with customer stakeholders and helps to move the conversation to why buy now and why buy our solution. Value Propositions tackle the problem of commoditization.

3. Customer Consensus. Increasingly, purchasing decisions are made by consensus rather than by single decision-makers. With better and more transparent communication, unanimity has become increasingly prevalent in business decision-making to the detriment of majority support and back-room coaxing and cajoling. A Harvard Business Review article highlighted the negative impact of larger group decision making on the likelihood of purchase showing that committees of 6 or more buy only 31% of the time.

Value Propositions well deployed are a good way for skilled sales teams to manage stakeholder conversations in the face of complex buying teams.

For example, consider how Value Propositions can help manage a group meeting with multiple stakeholders. Invariably participants in a meeting are interested in different product features, benefits and risks. Invariably some participants in a meeting have limited bandwidth and time. Product features are presented, perhaps benefits are shown. Then the customer analytical type in the corner starts to drill down, asking tough questions that include detailed support and quantitative assumptions as the eyes of other stakeholders in the room glaze over.

A good quantified Value Proposition provides a skilled sales person with effective ways to control the meeting. By highlighting summary value and articulating the sources of value, the Value Proposition keeps the attention of the broader audience. Refining the Value Proposition with detailed customer assumptions is a great reason for one or more follow up meetings with a smaller stakeholder group interested in the details. That small meeting often provides a better opportunity to connect with and build trust with individual stakeholders in a situation where the stakeholder has less to prove by being the smartest person in the room. Analytical and quantitative dialog without the larger audience can help build trust with the analytical types. Value Propositions help build engagement and consensus with multiple stakeholders.

4. Complexity. With increasingly complex businesses and business problems, products and solutions are becoming increasingly complex as well. The result is that the decision to change, especially to a complex solution, becomes more and more difficult. Complexity stretches the bandwidth of managers, recommenders and influencers whose buy-in is needed in any decision to change. Compounding this problem are risk-averse stakeholders, unwilling to take a chance of switching to new technology or new approaches, who point to complexity as a reason to delay. The result is gridlock.

A recent tabulation of deal outcome results by Sales Benchmark Index found that Wins beat Losses to a competitor by a factor of 2 to 1, but that No Decision was the outcome of the customer decision process a substantial majority of the time.

Good Value Propositions cut through complexity. By showing clear bottom-line results for the customer, they convert a multidimensional problem into one-dimensional answers. Quantified Customer Value simplifies communication. By clarifying the sources of Customer Value quantitatively, good Value Propositions help reps in call preparation, spelling out how a customer’s business will be improved by a purchase. This helps reps clearly articulate sources of value qualitatively or quantitatively. Crisp, simple, direct messages are invariably good for sales confidence, improving sales effectiveness and reducing sales force turnover. Value Propositions focus the customer conversation on the essentials.

Summary. Great Value Propositions are useful active weapons that help sales accelerate long sales processes and improve profitability. Great Value Propositions help sales teams win. With a clear focus on customer success in the customer’s language, they can help transform the sales conversation into a collaborative one, highlighting differentiation clearly to support a consensus decision to buy.

Value Propositions work best if marketing designs them with an understanding of how they will be used in customer conversations. Essential elements of a good value proposition include ready access to collateral and the ability to support customer conversations to validate a product’s value. Value Propositions drive sales success most predictably when their adoption is strongly supported by an active plan. The best marketing, product management, pre-sales and sales teams realize this, implement a scalable approach to the adoption of value selling and deliver results effectively and collaboratively.

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