In a webinar presented by Marty Gilbert, president, Growth Initiatives LLC, and Bob Sherlock, president, Marketwerks, learn how to lay the foundation for solution selling, and then execute it. CompTIA’s webinar focuses on how to develop well-targeted value propositions for each customer segment, and bring them to market successfully.

1. Webinar: Selling Solutions Using a Compelling
Value Proposition
September 18, 2013

2. Selling Solutions Using a
Compelling Value Proposition
Marty Gilbert, President of Growth Initiatives LLC
www.growthinit.com • 847.732.7400
Bob Sherlock, President of Marketwerks Inc.
www.marketwerks.com • 847.382.6210
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3. Value Proposition Definition
A value proposition:
• Relevancy… Explains how your product solves customers’
problems or improves their situation.
• Quantified Value… Delivers specific benefits (quantified
value).
• Unique Differentiation… Tells the ideal customer why they
should buy from you and not from the competition.
• Customer Motivation = Perceived Benefits – Perceived Costs
• “Value proposition is the #1 thing that determines whether
people will bother reading more about your product or hit the
back button.” -- the new generation of decision-makers
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4. Solution Selling Definition
• Rather than just promoting a product, the salesperson focuses
on the customer’s pain and addresses the issue(s) &/or
problems with his offering of products &/or services. The
resolution of the pain is what constitutes a true solution.
• Solution selling means targeting the types of companies most
likely to benefit from your products and services so that you
don't waste time selling to people who shouldn't buy anyway.
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5. The Importance of Value & Solutions
• Product features often speak to technology & not the
customer’s needs.
• Product feature focus runs the risk of implementing
capabilities that are irrelevant to the customer (over-
engineering).
• Product feature focus tends to commoditize & devalue your
product over time.
• Salespeople need products & stories that solve problems.
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6. From Products to Value to Solutions Selling
Defining Customer Pain Points
Converting Needs into Solutions
Refining Your Value Proposition
Selling via Solutions
The process starts with understanding your customer’s pain points
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7. Vertical Market Pain Points
• Excessive operational costs that are reducing profitability
• Lack of process is leading to inefficient operations
• Security breaches put our database at risk
• Logistics costs are getting out of hand
• Price erosion due to product commoditization
• Difficulty in determining investment priorities
• Regulatory environment makes our future uncertain
• Stagnant revenue growth
• Quality concerns
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8. Horizontal Pain Points
Decision-makers may differ by industry
Operations
IT
Marketing
& Sales
Finance
CEO/COO/Pres
Healthcare Manuf Education Telecom Financial Svs Transport
= Decision-maker I N D U S T R Y
RESPONSIBILITIES
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9. Converting Needs into Solutions
A healthcare IT solution example for the XYZ System:
Need Solution
Each hospital within our health system
performs at different operational levels & we
don’t know why.
Identifies under-performing departments, key
contributors & recommended course-of-actions to
reduce cost & improve efficiencies.
Each surgeon operates in a silo which creates
variations in care and increases our
procurement costs since each physician
purchases his own surgical materials.
Surgeon vs. surgeon procedure analysis identifies
optimum surgical approaches to improve quality of
care, lessens legal risks and reduces costs by
purchasing optimum surgical materials in volume.
We don’t know where we should be
investing in terms or staff, technology and
our physical build-out.
Predictive analytics identify what kind of patients and
diseases are likely to enter your hospital. This,
coupled with new technology entrants enable us to
recommend staffing, structural build-out and new
equipment investments to meet changing local
market demands over the next 5 years.
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10. Refining your Value Proposition
The 4 steps to building a value proposition:
1. Define - 2. Qualify - 3. Evaluate - 4. Measure
1. DEFINE the problem set to determine which problems are
worth solving.
– Is the problem unworkable?
– Is fixing the problem unavoidable?
– Is the problem urgent?
– Is the problem under-served?
2. QUALIFY the problem
– Are you addressing an unmet need?
– Do you have a meaningful competitive edge?
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11. Value Proposition Points
Prospect’s
Needs
Your
Solution
Competitor’s
Solution
Points of Difference
Points of Irrelevance
Points of Parity
Differentiation matters if it’s important to your prospect
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12. Refining your Value Proposition
3. EVALUATE whether your solution is unique & compelling
– Discontinuous innovations… transformational benefits over the
status quo
– Defensible technology… IP that can be protected to create barriers of
entry and unfair competitive advantages
– Disruptive business models… value & cost rewards that help
accelerate growth
4. MEASURE potential customer adoption using the pain/gain
ratio
– Game-changing benefits with minimal modifications to existing
processes
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13. The Pain / Gain Ratio
• Revenue
• Cost-savings
• Time
• People
• Reputation
Gain
Inertia
Pain
• Switching costs
• Alternatives?
• Good enough
• Default = do nothing
• Try
• Buy
• Implement
• Broad deployment
• Own – TCO
Goal: Disruptive innovation that is non-disruptive to adopt.
to implement
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14. The Pain / Gain Ratio
• Revenue
• Cost-savings
• Time
• People
• Reputation
Gain
You win when the Gain exceeds the pain of adopting
Pain
• Try
• Buy
• Implement
• Broad deployment
• Own – TCO
to implement
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15. Building the Value Proposition
Here is a very simple framework from which to build your value
proposition…
• For (target companies)
• who are dissatisfied with (the current alternative)
• our product is a (new product)
• that provides (key problem-solving capability)
• unlike (the product alternative).
For hospitals that are dissatisfied with ineffective tools for improving care and
reducing operating costs, our XYZ System provides clinical performance
analytics and predictive modeling solutions that help reduce operating costs
by 10%, eliminate errors by 15% and improve patient satisfaction scores by
20% within the first 2 years of implementation.
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16. A Poor Value Proposition Example
McKinsey’s corporate finance site
Our value proposition rests on an unrivalled package of strategic, transactional and financial
advisory services, uniquely linked with independent judgment and deep industrial/commercial
insight.
Our reward is not “transaction-based”, so we can maintain genuine objectivity in our client’s long-
term interest. In negotiating and carrying out an engagement for a client, we participate fully in
the client’s corporate thinking, and take into account not just the immediate value and impact of
the project, but its context and implications over a longer period of time.
We work closely with management and other advisors, such as major investment banks, to
leverage and complement their knowledge and ensure maximum impact. We try to foster senior
management’s commitment to our recommendations and actively support implementation and
skill building.
Comments:
• Not targeted to any specific audience.
• No quantified value/contribution.
• No competitive differentiator.
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17. A Good Value Proposition Example
VMware
For IT organizations wrestling with the high cost and inflexibility of the old “one server, one
application” model, VMWare can improve the efficiency and availability of IT resources and
applications through virtualization. About 70% of a typical IT budget in a non-virtualized
datacenter goes towards just maintaining the existing infrastructure, with little left for
innovation. VMWare can free your IT admins from spending so much time managing servers
rather than innovating. An automated datacenter built on the production-proven VMware
virtualization platform lets you respond to market dynamics faster and more efficiently than ever
before. VMware customers typically save 50-70% on overall IT costs by consolidating their
resource pools and delivering highly available machines with VMware vSphere.
Comments:
• Starts by describing the target customer’s problem their product solves.
• Quantifies the problem: 70% of an IT budget is spent on maintenance.
• Describes the benefits of implementing a virtualized data center.
• Offers a range of IT cost-savings from their typical customers.
• Only missing a statement regarding their competitive edge.
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18. Selling via Solutions
Key steps to solutions selling:
1. Prioritize the markets to pursue.
2. Understand the customer’s organizational structure, key influencers
& decision-makers.
3. Align your value proposition with the customer’s needs.
4. Quantify the value of your solution
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19. 1. Prioritize the Markets to Pursue
Here are some of the criteria that are commonly used to
determine solution selling prioritization:
a. Market size
b. Ease of entry
c. Likely average order size
d. Competitive environment
e. Length of time to close contracts
DOES YOUR PRODUCT DELIVER A UNIQUE SOLUTION THAT IS
CRITICAL TO THIS MARKET?
– If yes, then items a-e above will become less important.
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20. 2. Understand your Prospect’s Organization
Create internal champions with spheres of influence.
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21. 3. Align Value with Customer Needs
Create Awareness
Build Credibility
Demonstrate Value
Close
Qualify
Pitch
Negotiate
Close
Build Credibility
Demonstrate
Value
Create Awareness
CUSTOMERSales Marketing
Recognize need
Gather info
Evaluate
Buy
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22. 4. Quantify the Value of your Solution
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Cumulative
Cost
$
Incremental
Benefit
For example, the implementation of our product delivers:
• 10% increase in sales in Yr 1, 20% in Yr 2.
• 20% reduction tech support costs from implementation.
• 10% reduction in headcount after 6 months.
• 30% increase in average order size by month 12.
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23. One Additional Value Prop to Consider
The value proposition to your channel partners:
• Manufacturer’s objectives
– The 3 Ms: mindshare, market share and money
• Channel partner’s objectives
– Financial benefits
• Sales margin, service revenue, add-on business, annuity revenue if possible
– Product differentiation
– Product quality & reliability
– Product alignment with the partner’s customers or vertical markets
• Reduces their cost of sale and time spent prospecting
– Training, technical support, marketing support & MDF
– Revenue opportunities after the sale
• Implementation, support services, license renewals, etc.
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24. Your IT Industry Association
Get this recorded webinar at www.comptia.org:
Selling Solutions Using a Compelling Value
Proposition
Register for future webinars at:
www.comptia.org/events/webinars