If you are attempting to market a business-to-business (B2B) solution or technology, I’m certain that you are finding your job tougher than ever.
In these tight economic conditions, the emphasis on value creation is central to your sales and marketing strategy. But simply claiming value does not close the sale. These days, you have to prove it. This week, I’m going to tackle this issue and provide a simple framework for developing value-driven marketing plans.
Many companies have invested a lot of time and hard work to develop sales-tool kits that focus on demonstrating return on investment (ROI) related to a product or service. While an analytical approach to marketing and sales is in the right spirit of quantifying value, the results often prove a little disappointing. Many models fail to provide leverage with customers.
So, what are we to do? What follows are a few simple guidelines to help you add more punch to your value-driven marketing efforts.
Get Better Research to Ensure Better Models
Poor data and a failure to understand the business metrics relevant to an industry or customer are probably the greatest weaknesses of most ROI models. Too often I see ROI models that fail to address metrics that are important to customers. Thorough research of a customer’s business and industry is required to develop accurate models that are relevant.
Another common mistake many companies make is to depend too much on reports from industry analysts. Although research firms provide a tremendous amount of value in monitoring macrolevel trends, they provide little value in detailing the intricacies of individual companies.
Conducting customer-focused research before developing your ROI model enables you to quantify less-tangible qualities of a product or service. For example, “usability” could translate into improved sales, or “responsiveness” may translate into increased repeat sales. Refining your research skills to develop a tailored set of measures for each customer will improve the impact of your value proposition.
Provide Relevant Benchmarks
Statisticians have long understood the concept of measuring metrics against benchmarks. However, many marketing managers in the technology space are hesitant to demonstrate performance vis-`-vis competitors or alternate decisions.
Value-oriented marketing strategies that are successful require companies to rank their results against some type of standard. Simply declaring a 10 percent savings for an organization is meaningless unless it is described in the context of an alternate choice. How does your solution compare against a client’s in-house solution? Or, better yet, how does it stack up against your nearest competitor’s?
Customers want to know the relative impact of your offering.
Measure Value of the Entire Package
Software companies in the B2B space often underestimate the total investment required by a company to realize gains from their software solutions. To deliver an accurate description of value, you should account for all associated costs in any model. B2B solutions often carry with them implementation costs — service, support, maintenance, and training — that can be fivefold the cost of the core offering.
If your value model fails to address these requirements, it fails to provide your customers an accurate estimate of ROI.
Many times, the benefits of associated services can offset price differences between your and your competitors’ offerings. Today’s ultracompetitive market requires companies to demonstrate the value of ancillary services, not just those of core offerings.
What Is the State of your Marketing Strategy?
Technology companies attempting to acquire business customers in our current climate face incredible challenges. A thoroughly compelling business case, supported by solid research and analysis, is required to generate revenue in this market.
If you have developed ROI models to articulate the value of your product or service, your company has started down the right path. The next challenge lies in refining your models so that they address specific measures that are relevant to each customer.
If your company is attempting to develop a value-oriented marketing strategy, I would be happy to hear about what you are doing and how effective your approach has been.