How do you shorten your sales cycle? B2B sales can be long and dragged-out dealings, especially for software and telco vendors. Keep reading to find out how you shorten your sales cycle by applying business value management.
What is the sales cycle?
To start, we need to explain the sales cycle. The sales cycle, in essence, is all the little and large steps that you take to close a sale. The cycle begins when your salesperson makes first contact with a prospect, and it ends when you close the sale. When your target customer decides if they want to buy your offering, or not. Most importantly, when they sign the contract and submit a purchase order. There are a few steps in between making contact and closing too, such as fostering and quantifying your leads. With all sales processes, the aim of the game is to close the deal; it’s just that some ways are faster than others.
Sales cycles are unique processes for companies across different industries. They are shaped by many factors, like the type of industry, product, customer base and target markets. Some only take a few minutes, hours or days to complete, for example in retail. And for other companies the sales cycle may last for several months or even years, like B2B software sales. The more complex the product, or the riskier the decision is, the more doubts and questions customers will have and the longer the cycle will take.
Software sales can be tough and have really long cycles
Software sales can often last between six months and two years. And for software vendors and telcos you’re basically selling something that your buyers can’t connect to emotionally until they have bought it and are using it. It’s all pretty intangible in a world where we all have to see things to believe them. The risk in B2B software sales is also high, especially for the bigger projects. Risks can include supply chain disruptions as well as more personal ones such as decision makers being fired if the project fails.
Why shorten your sales cycle?
For those in software, shortening your sales cycle is one of the biggest challenges you’ll face. But when you successfully shorten your sales cycle, it means that you can speed up your cash flow, increase your competitive advantage and, in the long run, your market share too.
Leading companies nearly always close their sales earlier than their direct competitors. The faster a company goes to market, the faster they can get more customers. Sometimes, how quickly you can close a sale is the tiebreaker for your survival. For the companies with a lot of direct competition and small product differentiation, shorter sales cycles can mean life or death. And for a seller, making the sales process quicker is also about getting the commission earlier.
So, how does value management make your sales cycles shorter?
1. It helps you quantify: to differentiate your product from your competition’s and ensure price protection
In software sales, products are usually pretty complex, and the benefits aren’t very easily proven. The ROI don’t just depend on how good the product is, they depend on the sponsors, the implementation teams, the final users and the company’s internal politics. This is why it’s so helpful to apply value selling. Sure, you can pitch all the awesome capabilities of your product, but this often isn’t enough. Especially where product differentiation is really small. You can generate product differentiation and price protection by transferring the focal point of your sale to the business impacts. And when you can separate yourself from your competition, you will shorten your sales cycle.
You see, when your customers can see the real value benefits in your offering, they will feel more emotionally connected, more compelled to choose you. And they will also feel more of a sense of urgency and will want to move faster.
2. Show how much your product is worth rather than talking about how much it costs: protect your prices
Business value tools will really help sellers to measure the relevant performance indicators (KPIs), and better understand the main industry trends, where a company stands within their industry, and a company’s specific business goals. With sales tools that give you this level of insight, it is much easier to show the decision makers how your solutions will bring value and soothe their pain points. When you can identify and easily measure KPIs, you can show the decision makers very clearly how and why they can justify spending out on your offering. The easier it is for BDMs to decide, the faster they will make their minds up and the shorter your sales cycle will be. Here’s an interesting post that Shark Finesse recently shared on their LinkedIn to support this point.
When you follow a value selling approach it helps your customer to really understand the cost of opportunity: the actual benefits that your solution delivers, and how it compares with your competitors’ offerings. Value selling doesn’t centre on the cost of your product; it focuses on the benefits that align with the target company’s goals.
When you can help your customers to see your offering as a benefit rather than a cost, the price becomes secondary. This avoids demands for sales discounts that lead to price erosion and loss of revenue margin. Value selling drives rational conversations for decision making which eases conversations with higher management. It helps customers to commit and invest without trying to barter you down on your price.
So, you can shorten your sales cycle by focusing on value and you can protect your prices too.
3. Connect: get closer to your target customers to close the deal
With value selling, you will naturally get closer to your customers. This approach fosters cross-departmental conversations, which deepens your customer relationships. And this helps you to understand all the needs of a business, from different points of view: from different departments and areas.
It is more a connecting process than a selling process. A collaboration, where you focus on your customer needs and pain points and any questions and doubts are answered. Value selling inevitably facilitates faster sales in software. It helps you make sure that your offering really attracts and leverages a customer’s goals and pain points. Your sales openings get converted into leads so much faster than they would with more traditional sales approaches.
4. Foster long term trust and credibility: and deliver on your promises
Increase customer satisfaction and avoid some common sales dilemmas
Often, in software sales, an issue for your target customers is getting them over the past negative experiences they’ve had with other companies. They think of the time where they spent out a lot of money because they were promised some great benefits – and they didn’t ever arrive. We all know that false promises create mistrust.
The question is, do you know your customer’s main concerns? Well, with value selling you get to know customers pain points and needs and, with that level of focus, you’re a lot more likely to build trust. And when you apply value selling, you’re also more likely to deliver your customers what you actually promised them. Read more about this in our earlier blog.
Another perk here is that it’s easy to avoid the misunderstandings associated with a long communication chain. It opens up discussions that raise all the various issues from different stakeholders, but it forces the seller to provide the arguments for why the solution is beneficial for the company or client as a whole. Value management is a holistic approach that focuses the minds of buyers and sellers on the business needs, and it forces quantitative arguments.
Additionally, when you shorten your sales cycle, you reduce the chances of things going sour along the way. Your customers won’t get bored of waiting, you’ll lessen the chance of misunderstandings, and you’ll reduce the risks of political interests that can appear when sales cycles are long. The whole process becomes much speedier when you have built trust and credibility.
5. Lose fast: you don’t have the time to waste
On the flip side value management also allows you to lose fast. Can your offering actually help your customer’s business? If there is not a viable business case, you realise early in the sales cycle and you can move onto the next opportunity. You don’t waste your time or your target customers’ time for months on end. If you don’t have the right tools for your software sales, you can end up clinging on to the wrong opportunities for way too long. And none of us have that much time to waste away! With more available time, the value selling team can follow more new leads to open-up new opportunities.
To wrap up
Business value management helps you to make your sales cycle shorter in so many ways:
- by quantifying your offering and building qualitative arguments,
- by cutting the time spent on price negotiations and offering much better price protection,
- by helping you to ensure closer relationships with your customers,
- by creating credibility and trust
- And by making sure that if it’s not viable, you lose quickly
Business value management is a continuous engagement process, and because it focuses on the needs of the customer and engages all relevant business departments it makes decisions easier and the sales cycle much faster. A shorter sales cycles helps you to free up more time to meet with other new target customers. More leads can grow your sales opportunities, and this means that you can increase your business revenue.
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At The Value Search Team, we can build, operate and scale your value management practice. Any time, and from anywhere. Can we support you with your software sales or help you with your value management practice?
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