Being able to explain the value proposition of what you sell in terms of the business benefits to the customer is a vital skill in any market conditions. In a tough market, when many organisations have dramatically reduced their spending, every decision to purchase products or services must be justified with a strong and compelling business case. This must prove how much money will be saved or generated as a result of using the product or service.
Tough markets force changes on customer's purchasing criteria and for that reason suppliers must have a clear definition of their "ideal customer". Precisely what are the characteristics of the ideal customer? For example their size, location, type of business, pressures they face and the problems they will spend money to solve. Data should be gathered from the sales force, the customer base, marketing, and business partners. Competitors also need monitoring to detect early signs of a change to buying priorities in the market.
A generic business case for the product or service is only a starting point; this must then be tailored to appeal to different decision makers in the customer who will each have their own criteria that need addressing if they are to approve a decision to buy. For example finance managers may consider cost reduction aspects of the decision; operational people will evaluate the ease of using the product and the efficiencies it can deliver whereas service managers will be concerned with improvements to their own customer service.
Detailed examination of existing customers is essential:
- their decision to buy,
- who was involved,
- the criteria they evaluated the product against
- what triggered the decision to be taken
Business cases to buy products or services may come from a variety of different reasons. Some organisations will be motivated by reducing costs and efficiencies. In the commercial sector companies may be motivated by being able to launch a new service to their customers and generate revenues. The need to comply with government regulations can drive others to buy
Building a business is a consultative process and needs to engage the customer's people in order to obtain the data on which the case is built. Simply sending a spreadsheet projecting potential savings or gains is not effective and is almost certain to be dismissed by the customer.
There are some steps and tools that can be used to construct a business and these are discussed in our online course How to protect your topline in a downturn (buy now at 50% off)
One very powerful tool to use is a set of questions that are designed to uncover the amount of savings and gains that the customer should be able to achieve by buying your product or service. For this to be credible the question list - and the likely range of answers - needs to be built from data obtained from existing customers.
Without a compelling business case customers will, in the current economic conditions, delay buying decisions and probably decide to do nothing! By direct contrast suppliers who adopt business case selling achieve higher value sales, increase their win rates and by definition lock out the competition more often.
Richard Lowe
www.lets-begin.com
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