Many CEOs come to us looking for answers. When sales are stagnant or taking a dive—especially with older companies that have been around for a while—it usually can be traced to two root reasons.
First, when sales were great, the market competitors were working away at introducing similar products commoditizing the industry. And second, while sales organization has been relying on the same messaging and sales techniques, competitors found areas to differentiate. What ends up happening are the following two things:
1. Sales People Can’t Communicate Value
According to Forrester Research, 80% of meetings salespeople have with buyers contribute no value from the buyer’s perspective. Meaning, the salesperson can’t connect the buyer’s needs and challenges with their product, or they are unable to match the right message, to the right person, with the right need. This translates to limited time with the customer and a sluggish sales process.
2. Sales People Can’t Differentiate the Product
Many CEOs and executive leaders tend to emphasize the rational reasons why people may purchase a product, such as the economic value in reducing costs and improving revenue or performance capabilities. Therefore, the product strategy and differentiation is engraved deeply in the product’s functionality. The problem is the competition is advertising similar features and saying the same thing.
The Modern Approach to Value Creation and Product Differentiation
With more sophisticated customers and complex B2B buying process, the key to improving margins and moving the sales process forward is to map the right value to the right person using deep-rooted psychology principles by which people fulfill their needs.
Mapping the Right Value Message to the Right Buyer Need.
Commonly, we see salespeople on calls regurgitating a sales pitch without taking the appropriate time to uncover their prospect’s needs, or spending too much time addressing a problem that isn’t urgent or relevant to the prospect. Here’s what you can do to avoid this:
- Come up with a set of powerful, thought-provoking questions your sales people can use to uncover problems and increase credibility in the prospect’s eyes
- Use SPIN methods to show the buyer the implication of not solving the problem today
- Compile a list of all the problems your sales people have heard and identify which ones have led to closed business in the past—these buyer pain points are likely the strongest.
- Use the list of urgent problems to map your product’s value in solving those problems, and encourage your sales team to focus their time on accounts that fit this criteria.
Maslow’s Hierarchy of Needs is a psychological framework that describes how human actions are motivated when fulfilling very basic needs (shelter, food, security) to more complex needs (such as self-esteem and altruism). This framework was applied to the corporate world by Bain & Company in their research on B2B elements of value.
In their research, B&C identified 40 value characteristics in different categories that buyers stated as important. These range from very basic product requirements to more personal and subjective desires. Their research found that companies who could add value in the more subjective and personal categories were more successful in selling their product than those that just focused on functional.
Below are a few sections from their hierarchy that are important to understand when differentiating your product:
- Functional Value. This category includes traditional economical and performance differentiation, such as cost-reduction, increase in revenue, and quality product.
- Ease of Doing Business. This is the category that gets more subjective and provides key areas for differentiation. Categories here include productivity improvements, relationship components (responsiveness, cultural fit, and expertise), operational simplicity, strategic elements such as risk reduction, and access and availability to different options.
- Individual Value. This category is personal and subjective to an individual and addresses differentiation areas around career reputation, reduced anxiety, and design and aesthetics.
“Even though the respondents stated that cost reduction was most important in their decisions, their answers to other questions suggested otherwise”.
The research identified that relationship elements such as responsiveness, expertise, and cultural fit, which fall under “the ease of doing business” and the ability to reduce personal anxiety or positively influence someone’s career, which fall under “Individual Value”, played a huge role on top of the more functional product value.
How to Get Started with Your Differentiation and Messaging Strategy
Putting this information in practice requires re-evaluating your sales messaging and differentiation strategy. Use the following steps to get started:
- Audit your target customer segments to identify relevant personas and their top-of-mind pain points.
- Come up with a set of questions the sales people can use to help them identify more subjective and personal areas that motivate your buyers.
- Map your product’s value to the pain-points and identify how your product and company addresses more personal and subjective purchasing motivators.
- Compile a playbook and sales training to help your team learn, digest, and practice discovering prospect needs and aligning your product to different needs and motivators.