This week our post talks about how showing customers your true value, and avoiding the typical hefty discounts, helps you to grow your sales margins. In 2020 we witnessed a great year as the pandemic hit and software companies surpassed their targets. But 2021 was a bit more challenging – and 2022 looks like it will be an interesting year ahead as companies get used to doing business in this new and much more digital normal. Software sales hit an all-time high at the start of the pandemic and technology developments triggered the rise of new business models, that generated new revenue streams and reduced the cost of software solutions. For software vendors, circumstances have changed drastically in the last two years. Here are four ways that value management can help you protect and grow your sales margins : 1. Ease off on the discounts - big discounts steal profits Sales incentives
Our blog this week talks about the future of software sales. Keep reading to find out how business value management can help you win in the new normal. The worldwide chaos during the pandemic sped up digital transformation across many companies. Working from home through the lockdowns has greatly changed businesses. Software sales, and how companies build trust with and target customers, is a whole new ball game (Gartner 2021). Nearly two years on from the first lockdowns, buyers and sellers have welcomed digital transformation with open arms. Software solutions are now a big part of many business workflows. Differentiation was already pretty tough for software companies and their customers; often, solutions are very similar. This means customers are forced to look beyond a product’s features when they make buying decisions. Sellers now need to take a fresh approach to influence their buyers and win in the new normal. As
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
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,
Is your value management team working as effectively as they could be? This week our post looks at four ways to help you boost your practices to ensure effective value management. Why value management? Business value management goes way beyond selling your solutions. It connects your customer’s business needs with your solutions. It’s about looking at the money your solution can bring or save a company, rather than on how much investing in your solution will cost. Value selling brings many more benefits than it appears on the face of it and, when the best practices we shared with you today are followed, it generates positive results. Sales conversations that focus on your product bells and whistles and how much your solution costs are becoming a thing of the past. Effective value management helps you increase your sales Sometimes we see that vendors only get underway with business value conversations and call on value managers for help when they are getting themselves deep into troubled waters with cost-based sales. But when you’re
You can get closer to customers with specialist business value management software, as it helps you avert time wasters and get bigger and better deals. Can you think of a few occasions where you lost a software sale to a direct competitor at decision time? Or maybe you lost your customer because it appeared like you were inactive or doing nothing? – but you find out after exactly why your customer opted out and consequently you were left feeling like they wasted your time. Software sales are really hard, and often lengthy. When customers are reluctant to engage In software sales sometimes it’s tough to engage your customers. Often, this is because they are hesitant to talk in any depth about the business impact of a solution. This can signal that your prospect isn’t very serious about your offering. But the customer may just be looking around for ideas. Or, possibly, they are gathering several competitive quotes together and are looking for the cheapest deal. And it could be for many other reasons. For instance – as we touched on with our opening question – a bad experience in the past where a vendor built a business case with the customer, but the process took up way too much time and gave the customer nothing meaningful in return, so they decided not to go ahead. Or maybe you didn’t clearly draw the lines between your solution and the value in money it could bring your customer. So, how do you deal with these customers? Making them understand the reasons behind the value engagement journey you want to take them on isn’t easy. In
Do you wonder how value engineering teams successfully scale their sales materials? We look at 7 key pointers to ensure a successfully scalable value management practice in this week’s post. We will develop on one of the ideas we talked about in our previous article. Why is a scalable value management practice so important? Being able to scale effectively with a value management approach, demands a practice that can easily expand. Believe us, having the ability to scale your sales deliverables when you are creating even 50 within a month is really tough; even with the best tools and a fabulous value management team! And it gets even tougher when this total rises into the hundreds. For a value engineer faced with a multi-million-dollar opportunity, it is common to spend many hours creating well customised outside-in reports, ad-hoc value-potential evaluations, and building complex business cases. For leading global software vendors, the money they spend on these sales isn’t
This week, our post looks at four reasons value management reduces discounts and improves your sales margins. Keep reading to understand more about how value management reduces discounts. “Value management” is a logical, multidisciplinary approach that helps you discover the real costs of a service or product and to understand the real benefits it can deliver to customers. With value selling you can show off and increase the value of your offering. Check out our earlier blog on why you should apply value management if you missed it: 5 REASONS TO IMPLEMENT VALUE MANAGEMENT - The Value Search Team. So, why does value management reduce sales discounts? As a customer, who doesn’t want to get the best deal and pay the best price? There are lots of reasons that make us want to ask for a sales discount – we can’t stretch to the budget, we had a better quote elsewhere, or maybe we can’t fully grasp the value. And, as a vendor there are equally lots of reasons to give sales discounts: ranging from product differentiation to placement against competitors. But what about your business’ sales margins and your price protection? Sales
Until recently, business decision makers thought that improving the sustainability measures in their products and services drives up costs. However, this view is shifting in companies across the world as decision makers can now see that taking the steps to better their sustainability can create a source of competitive advantage. In this week’s post, we are talking about how vendors can measure their sustainability using a value management approach. To learn more about implementing value management, please, check out our previous post. Sustainability as a cost-driver Typically, businesses measured the improvements they made to environmental, social and governance (ESG) areas on how much they cost. So, ESG developments were looked upon as cost drivers in the early days. But this assessment was pretty biased because it overlooked efficiency income. This caused business decision makers to make unfit judgments and choices. For instance, if you make a product more sustainable, on the one hand it could cost more to produce, because of more pricy but environmentally friendly manufacturing processes. But on the other hand, your customers might think this product is better and is worth more, so you can increase the selling price and, the product creates more income. Traditionally, sustainability has been deemed as a cost-driver Can sustainability conversations focus on revenue generation? Customers’ decisions are shaped by ESG matters, and industry leaders of today know they can find a source of competitive advantage if they make moves to
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