What strategies do you use to boost your sales and grow average deal sizes? Let’s face it, every sales rep wants to grow the total size and revenue of any available deal or opportunity, but in B2B software sales closing a deal is becoming more and more of a challenge, never mind growing one.
Have you ever hit a rock bottom profit margin due to ever negotiated renewals? Or have you dropped a deal last minute because it seemed too small to be worthwhile? – only to find out that you possibly just overlooked a super deal all because you were assuming there is nothing else to sell at your customer beyond their usual pack. Or because you were completely unaware that your software is only covering 10% of your customer’s needs and other vendors are taking the rest? You might be managing an account thinking it’s super small, and putting in very little effort, when it could be so profitable that you could have a full-time account manager.
Increasing average deal size for business software and technology companies really is a totally different ball game. In software sales you’re trying to meet the needs of a whole organisation, not just the needs of an individual. You’re trying to attract a group of business decision makers, with different aims and goals. To top it up, your product is quite intangible. Not an easy task even for the best of salespeople.
In our experiences at TVST, if you want to up your game and grow average deal sizes, the best thing you can do is master the art of selling based on value. But “how?”, is the question. So, without further ado, here’s how following a business value management approach can support you to grow your sales.
5 ways value management can help:
1. Leverage your salespeople and your back office
Most sales leaders don’t think that how you as a business grow average deal sizes is something they have much control over. Some think that multiplying an average sale is unreasonable. Or they try traditional approaches to upselling and cross selling and find it so hard that it is not even worth the effort. But let’s all remember the F-A-B (features, advantage, benefit). In value selling it’s all about the benefit, i.e., value! You need to make sure your salespeople are centred on this to increase your average deal sizes!
Your sales reps are your leaders here – they are the people who will help you attribute your value to more revenue. So, they need to be fully on board. Being a product expert is not enough, you will need to understand your customer business, talk their language and gain confidence to effectively drive results.
To consistently grow average deal sizes, you also need a value management back office to support your sales execution strategically. With a business value management team your back-office team can help with the content creation, which means that your salespeople can focus more on the sales. It’s more productive and more efficient.
2. Speak to the BDMs
You can save yourself time and energy by engaging directly with decision-makers. Once people in powerful positions understand your value, they will get things moving and the sales cycle shortens. Selling someone in the C-suite on your product will also have a much bigger impact than convincing a mid-level manager. Read our last blog to find out more on this.
It’s really important to listen. To get to know how your prospects view their biggest challenges. With this info you can understand how your product will best help them.
So, why talk about value?
Companies all need to create value to survive. This is the key to value selling and to help you grow average deal sizes: survival! When BDMs make buying decisions it implicates that they believe their choice can:
- Increase revenues
- Reduces costs
- Mitigate risks.
If you focus your sales efforts on the right people and keep these points in mind, you’re sure to show your product’s value and grow average deal sizes.
3. Build an outside in to be used as a door opener for more add-ons
Building an outside in, a report in which using your target company public financial information you estimate the value you deliver, is all about helping you open the right door to access the right decision makers. When you speak to the right people you can let them talk about the big picture. By applying a value management approach, before you know it, you’ll have the knowledge to see how you can solve a big problem for your customers, before they even know that they have it.
Adding value is different for every company. What your clients find valuable will depend on their priorities and other factors that you can learn by leveraging your customer relationships. The point here is that when you are focusing on all the benefits and values you can bring, you can more easily show customers how you can increase that value. Your back office can help with the content creation for these reports, and scalability is also something to keep in mind.
With value management, drawing the links to an add-on or complementary service becomes so much simpler for your salespeople. And, in turn, you’ll grow average deal sizes. In this competitive landscape, it’s all about finding added-value openings to upsell or cross sell.
Ultimately, growing your opportunity really comes down to building trust. And whether your customer thinks of your salespeople and your company as a partner. Do you understand their situation and business and offers insights, advice and solutions? – sometimes even before being asked! It’s your job to show you can. And here is where business value management can really help you to grow average deal sizes.
4. Get the inside customer data
Your back-office team should always do their best research to get a better understanding of your prospect’s needs when they build the outside in. But it’s the real data that your customers give you when you are working with them to build a business case that helps you find the real value opportunities. Leveraging business value data, you can evolve your outside in into something very customised – with real data and with the KPIs that really ring a bell for them. A pre-packaged set of KPIs won’t help you to fly!
When it comes to the business case, a value management approach allows you to get more exact data from the customer to build a more realistic value assessment. And accuracy helps you to build credibility and steal even more interest from the company you’re dealing with. You’ll end up with your customers’ most up to date data. Data that is not public! And the best part is that they’ll happily volunteer all the data or figures you need, if the value you showed them is appealing enough.
Your success story depends on how well you can show your customers the value of your offering. With the right data you can engage your customer in a dialog about KPI improvements tied to your product features and capabilities. And, most importantly you can show that these KPI improvements are always related to more benefits. Benefits that mean more revenues, more savings and reduced risks. As a knock-on effect, you’ll win bigger and better deals.
5. Swap discounts for value-adding extras
Engaging with your customer in a collaborative process to co-create a business value route will generate a shared plan that focuses on where you can add value instead of underlining the negotiation process where you offer discounts to close sales. You will find yourself working side-by-side with your customer instead of looking at each other from opposite sides of the road. Moving away from discounts to focus on value is a simple mindset shift that will help you grow average deal sizes. More on this is our earlier post.
While it is important to describe what your product does and how, if it’s not balanced with its value generation potential what you are doing is burdening your customer with the extra work to figure that part out. Or even worse, your customer will never make the effort to figure it out. In this case they will either make an emotional decision based on the salesperson they like the most, go with the one who presents any sort of value management, or be so petrified they never decide (going on autorenewal either for the same amount currently contracted or going with an incumbent forever).
As customers, we all love a great deal. And most customers these days are pretty brazen when asking for a sales discount. But price reductions in software are often huge. And, while a strategic discount can pretty much instantly close a deal, it is much more beneficial to spend a bit longer getting closer to your customers and building trust showing them the value you can bring, reframing their vision of a good deal. It’s pretty clear from our experiences that building trust will always lead your customers to make more profitable decisions.
Avoid the common get outs
The thing to be bear in mind here is that to mitigate their risks and save on the initial outlay, while also allowing them a trial run, your customers may be looking to purchase the lowest-level subscription you offer. Maybe, only signing up to a small number of seats. But with business value management, you can show them the ROI playing with different deal sizes and different timescales, as well as different implementation methods. If you can focus on the value and business benefits that more seats or a higher subscription to your product will bring, then they are less likely to barter you down and hinder your sales growth.
How can you make it easier for your prospects?
Business value management allows you to tweak and challenge the numbers and the scope, tailoring your product and offerings to your prospects’ needs. And the numbers – or monetary savings – help you create a sense of urgency to push forward their decision. You see, with value selling you can show your customers that they are missing something really good – that there is even more that your product can help with than you presented from the outside in.
To wrap up
At the end of the day business value increases the scope of the opportunity. It helps you to find the right decision makers, moves the conversations away from price until much later in the process. And it helps you to build credibility and trust. Trust is the key to success in B2B software sales.
Without using a value management approach to grow your deal sizes, you are risking sending salespeople on calls and customer visits that go nowhere. You also risk targeting the wrong accounts, and, in the long run, you’ll be wasting your time that could be spent growing more deals.
With the help of a great value management team, you can help your customers solve even more of their business problems and find value in lots of new places. And while you build trust and gain credibility, you can also grow your sales, average deal sizes and ROI. With all the benefits quantified, you’ll be hard to turn down. We know that, in theory, using this method sounds like it’s going to be a piece of cake. But how about in real life?
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