(Day 9) Why Impact Eats Value For Breakfast

Welcome to Day 9 of X-Factor: 10 Days of Epic Sales Knowledge! Today’s article comes to you from Winning By Design’s Jacco vanderKooij.

Make sure to check the links to the previous 8 days at the end of the article.

Sales is changing and transforming faster every single year. I used to say that its not your daddy’s sales world anymore…you can safely say its not your big sister’s sales world anymore. One thing that hasn’t changed is the need to create value for customers. A salesperson’s ability to create value has long been the attribute that not only wins business, but creates relationships with customers that endure for entire careers. Jacco vanderKooij is the founder of Winning by Design, an organization helping over 150 of the world’s most successful SaaS sales organizations surpass their growth goals. Jacco understands how to be so valuable your prospects and clients can’t ignore you. His book on scaling SaaS sales teams, “Blueprints for a SaaS Sales Organization” is filled with insights every sales org needs to consider. Today Jacco shares an insightful blueprint on how to be valuable to a client. In typical Jacco fashion…you may be surprised on what makes you most valuable. If you aren’t following Jacco yet, start. If you haven’t read his material before, get it. If you ever have a chance to listen to Jacco speak do it. It is our pleasure to bring you insights today from one of the best leaders in sales. As you consider your 2018 plan, consider how you create impact. It is a catalyst worth tapping into.

Here’s how you can follow Jacco:

Website: winningbydesign.com
LinkedIn: /in/jaccovanderkooij/
Twitter: @IndoJacco

WHY IMPACT EATS VALUE FOR BREAKFAST

Value is achieved over time whereas today’s SaaS buyers operate at higher speed and want immediate impact. The impact is unlocked by driving usage. This requires organizations to understand the impact a product has. When talking with customers listen for the sentence “I bought your product because of VALUE XX, but what I did not expect is that it would impacts YY and ZZ.”

Historically, enterprise selling is based on the value a product offers, and it has been the sales professional’s responsibility to understand how their solution in the form of product and services would be able to help a customer solve their problem.

Selling Value Over Features

The role of consultative, even provocative, sales people is very similar to a doctor who wants his/her patients to be healthy. It’s no surprise that successful enterprise sales professionals use a diagnostic approach to identify the value a product offers, and to provide a value proposal to the customer. The value proposal describes all the “value” that could be extracted over a period of time by using the product. However, it never includes “true use”. It assumes that the customer will figure this out.

Figure 1. Value is the monetary worth of a solution to a customer’s problem

Impact Requires Use

Fast forward to today, a world where we buy a lot more than “the value your solution can provide.” Today we want to not just buy the value over time; we want the impact it can offer right now. Also customers do no spend a million dollars up front. They spend a few hundred thousand dollars to get started. You may be frustrated as you clearly offer a lot more value. Why are they not willing to pay? Because they have not experienced the impact! The difference between value and impact is usage.

Figure 2. How usage unlocks the impact of your solution

You may have sold all the value in the world, but at some point in time your customer literally needs to use your product to get the impact they want to achieve.

Extract Impact Out Of Value

Where many vendors fall short is that they do not help the client extract the impact out of using the product correctly and/or to the full extent. In order to do so, they must gain knowledge on how the client is using the product and offer help to unlock new areas of use. This increases the impact.

Figure 3. Increase use to increase the impact and with it increase the monetary value

Simple enough, right? So what’s the impact your product offers? No, I did not say the value it offers! What impact does it offer?

Layers of Impact

Figure 4.Value vs. Impact

In the picture above, you will notice on the left a traditional focus on how features of your solution enable new value for the customer. It is shallow like a banana, one layer. On the right you see that to uncover the impact requires something that feels like peeling an onion with multiple layers.

Three Kinds of Impact

Today we recognize three kinds of impact SaaS services has on a business.

Table 1.Three kinds of Impact of a SaaS solution

For years there were only two: increase the revenue and/or reduce the cost. However, in 2007 Apple came out with a phone. It was a lot more expensive, and it was arguably a worse phone than Nokia and Blackberry… yet we stood in line for hours because of the UX/UI. By the way, I apologize if as a UX/UI expert you feel offended by this simplistic approach – I’d love someone to teach me how to describe this better.

Today, with so many solutions available all with an incredible ROL, it is often the one with the best UX/UI who wins the deal.

Increase Revenue The need to grow overrules cost reduction because growth increases the value of the overall business as it brings in more logos, users, best practices, etc. Thus, it is no surprise that products that grow revenue enjoy shorter sales cycles and can be sold at a higher price. Think of products such as Lead generation and Sales Acceleration software.
Reduce Cost A solution that increases revenue hinges on an effectiveness driven model. Compare this to a solution that reduces cost which hinges on an efficiency driven value proposition. Buying a solution that reduces cost is the easiest, however, it operates at a lower price or rather a lower profit, and this makes the business dependent on volume of deals. Think of companies selling online storage.

The value of increased revenue and decreased cost reduces over time. What I mean is that we can’t keep reducing the cost year over year. Your biggest impact is experienced in year 1 of the service. This results in a client moving on after 2-3 years. However…

UX/UI. Improving the customer experience and/or interaction results in productivity improvement and it often looks and feels like cost reduction software; Easier to understand dashboards, easier to operate, improved collaboration, reduced risk, find better candidates, etc. This kind of impact is one step removed from revenue increases or cost reductions. Think of collaboration products, productivity tools, business intelligence software, human resources information systems, security products.

An interesting impact of UX/UI is that it offers long-lasting value. This is the reason why people are addicted to their Windows or iOS.

The Rise Of Feature Selling

Having said all this, I notice that there is a strong response to a *NEW* kind of feature selling. Yes, you heard that right. I have seen significant success on feature selling in two areas:

When features literally increase usage and thus impact – think of this feature as something that makes it easier for people to use the product and/or unlock new features over time.
When features increase the UX/UI experience – think of making something faster. With this feature you have to only click once vs. 3 times.

Conclusion

Here are a few practical take-aways:

As a solution provider, maniacally learn what the impact of your product or service is. You may hear this when a customer says, “I bought your service to help me with …. but what I found out is that it does …. And offers …. too!”
Coach your Customer Success team to derive the impact AND to recognize when a client uncovers a new kind of impact you did not know of (which may unlock a new market).
Develop a series of questions to uncover the impact for your Inside and Field Sales organizations.

I recommend that you start a conversation by forwarding the link to this article to your team member(s) and copy the following into the body of the message: “Check this article out. In particular, look at figure 3. Are we selling on the value we offer over time or on the impact we have on a client’s business?”

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Following a 15-year career as a head of sales for Silicon Valley startups, Jacco van der Kooij launched a sales consulting practice in 2012. Winning By Design, helps B2B companies with a blue print design that is based on best practices of what works today, oversee implementation including recruitment & training, and with a hands on involvement throughout the launch. Check out the Wining By Design playbook series for more from Jacco.

If you want to find out more about changing behavior in your sales teams with Xvoyant Coaching Technology,

You can get caught up with past day’s articles by clicking on their titles below:

Day 1: Millennials In Sales: What You Need To Know For 2018

Day 2: Annoying Persistence vs. Professional Persistence

Day 3: The Most Important Attribute in Coaching Top Performing Salespeople

Day 4: Transformation in the Digital Era

Day 5: Designing a Social Sales Blueprint for Sales Leadership in 2018

Day 6: One Haunting Sales Statistic Every Sales Leader Should Know

Day 7: Hiring Kick Ass Salespeople

Day 7 Bonus: It is Time for More Women in Sales

Day 8: The Five Keys to Great Sales Coaching

Day 8 Bonus: 5 Lessons a 2-Year Old Can Teach You About Sales Coaching