For technology vendors, three things make selling product value a waste of time. Here’s what to do instead.
Why Product Value is a Waste of Time
Technology vendors feel their products must have value for customers to buy them. And they feel they should try to show the value of the product during the sales process. If they show a strong value for their product, surely customers will buy.
Here are three reasons it’s a waste of time selling the value of your products.
Reason One – The Customer Situation Affects Value
The value of a product is a judgement made by individuals. And that judgement will vary depending on circumstances. For example, if you tried to sell a glass of water to a person lounging in a tropical oasis, the perceived value would be very low. Now consider that same person trapped in a desert without water. They’d pay a handsome sum for that glass of water. The glass of water has a very different value in those two situations.
The business situation of a customer affects their judgement of potential value. If they’re already growing fast and your offering will increase growth, the perceived value will be low. If that same company has poor growth, they’d perceive the potential value as much higher.
Same product, different value.
Reason Two – Self-interest Affects Value
Whenever a business change is proposed, individuals assess the impact on them personally. If they feel the change has a positive impact on them, they’ll assess the business value of the change as high. If they feel the change will have a negative impact on them, they’ll assess the business value as low.
Same product, different value.
Reason Three – Customers Won’t Assign Value to a Technology Product Alone
In B2B, technology products provide a means to achieving a business result. But the customer must take actions for the business result to happen. If they achieve a strong business result, the customer will question how much benefit was due to the software and how much due to their own efforts.
Because customers can’t separate the contribution of the product from their own work, they don’t like to agree to a direct value of the product. Customers will respond to attempts to do so with skepticism or even hostility.
If We Can’t Sell Product Value, What Do We Do?
We focus on something bigger. A business outcome.
In B2B, our products provide a means to a business end. They help create business outcomes.
When a business outcome is achieved, it creates a new to-be state for the customer. The business now operates in a better way. There’s a new level of performance.
It’s this new level of performance that creates the business value for the customer.
But the value isn’t only for the business.
We all like to think we make rational decisions when buying. The truth is different. We all buy the same way. We make an emotional commitment to a product or service, and then we rationalise that emotional choice.
A simple question drives the emotional decision – ‘how will this affect me?’. With technology products, decision-makers will show interest in how the company will benefit. But they’ll be more interested in how they’ll be personally affected.
A business outcome creates a new to-be state. We need the key decision-makers to want that to-be state. They must feel they’ll be better off personally. That creates the emotional buy-in.
Once key decision-makers have emotional buy-in, they still need to rationalise their choice. We must help them prove the business value.
So, our task is simple. Identify a business outcome that will create a new to-be state key decision-makers want. Then help the decision-makers prove there’s a business case for creating the new to-be state.
How to Use Value
When we engage with key decision-makers, we need to accept they don’t care about our products. They care about the business outcome we can help them achieve – the new to-be state. So, we keep the conversation about the business outcome. And the value the resulting to-be state creates. We’re talking about something they care about, and that will create rapport.
With rapport established, we then try to understand the emotional side of their decision-making. A simple question can help; “How might achievement of the outcome affect you?”. You can then dig a little deeper by asking about positive or negative impacts. You can also ask questions that might prompt them to think about the value to them. You subtly reinforce the personal value to them of the to-be state. And that will help you get emotional buy-in.
Once you have emotional buy-in, you can focus on establishing the business value. This is always easier once you’ve established emotional buy-in. The key decision-makers now want to go ahead, and they’ll help you find the business case needed.
It’s a waste of time trying to establish the value of technology products. Product value is affected by –
- the customer’s situation
- how a change affects each decision-maker
- the unwillingness of customers to isolate product value from their own efforts.
So, don’t focus on product value. Focus on business outcomes that create new to-be states for the customer. A new level of performance. It’s achievement of the new to-be state that will deliver the value to the customer.
That value will have business and emotional elements. Establishing emotional buy-in from decision-makers is the first thing needed. With that achieved, we can then prove business value . Customers will buy our products as one element of the business initiative needed to achieve the new to-be state.
And that’s how to sell our products.
This article is based on the book; The Outcome Generation: How a New Generation of Technology Vendors Thrives through True Customer Success
Paul Henderson is an author, speaker and consultant on outcome-based customer success for technology vendors. His last role was leading the Asia Pacific region of an enterprise software company. He saw the potential that could come from delivering real and measurable business success for customers. So, he initiated a customer success program based on customer outcomes. He and his colleagues developed, modified and proved the model over more than five years. He thespent one a half years researching and writing, culminating in the release of The Outcome Generation.