A couple of weeks ago I wrote about the importance of focusing on what technology delivers when selling technology solutions. The underlying reason for this is that you want to focus on the value that the solution delivers rather than what it comprises of.
Focusing on value is key to any sale. It doesn’t matter if you are trying to sell a technology solution, your own services, or any kind of product. If the customer believes it will deliver them value, then they will buy it. If they don’t see value in it, then they don’t.
Number of years ago when I was heading up sales at Microsoft Iceland, we had a campaign where we called every company in Iceland and invited them to come to our office and learn about our products. The key reason for doing this was to get them to buy Windows and Office licenses for the computers they already had. At this time, software piracy was a big problem in Iceland and we leverage this approach to rectify that.
I clearly remember this one small company CEO that came in after a call from our inside sales representative. Me and our chief licensing specialists sat down with him and tried to get him to buy licenses for the the software he was already using. Can’t remember exact figures, but the yearly subscription license we were offering was somewhere around $200 per year for each computer.
The CEO felt this was way too much to pay. He already had the software (illegally) and he didn’t feel any need to pay for this. While most customers were happy to become legal (and not pay any fines) then this guy was very stubborn. Finally, me and the license specialists gave up on trying to sell him Windows and Office, but we noticed the inside sales person had written down in his call notes that this customer might be interested in CRM (Customer Relationship Management) software.
So I asked our licensing guy to give the customer an overview of what Microsoft CRM offered. The customer became quite interested and after the initial pitch asked us how much that would cost. The licensing specialist explained that this would cost him about $350 per user per year. The CEO immediately replied with “That is not expensive at all”.
The difference between these two were that when it came to the CRM system, the CEO truly could perceive value. He immediately saw how it could help him and his staff better control their relationship with their customers, something that would result in more sales. At the same time he saw Windows and Office simply as necessary tools that provided merely the same value to him as the chairs and the desks in his office.
The same holds true when trying to sell your services to clients. If they feel that the services you provide are valuable, then they are willing to pay you accordingly. You will often see clients pay excessive prices for consulting services from major firms, simply because they have a reputation (not always deserved) for delivering valuable services.
It is therefore important for you to give the client a good understanding of how you will add value to what they are looking for. If the discussion immediately goes towards price, then you will not secure the deal.
In the company I now work for, Beringer Finance, we work with startups and help them raise capital. When we start talking to some startups, they think that all we will provide is access to our Rolodex and introductions to potential investors. We however explain to them that the services we provide are much more valuable than simply making connections.
First of all we work closely with the startup on preparing it for the capital raising process. Many startups are simply not ready to go into a capital raising process. There may be cultural issues that need to be addressed (see my blog post about this) and in some cases we need to work closely with the founders to clearly identify their target customer base and their vision for moving forward.
Next step we work on is putting together material that can be used to present/pitch the startup to investors. Often the current material founders have put together is too detailed or too vague (material for a whole blog post on it’s own). One key thing we see repeatedly is an inability to truly get across to the investor what value the product is providing to the potential customers and what “secret sauce” the startup has for addressing this.
Once we believe the material (and startup) are ready, we work with the founders and help them practice and hone their pitch. We help them identify what at Microsoft we used to call Rude Q&A. These are tough questions that they might get asked and the answers they are going to give when asked those difficult questions.
When both the material and founders are “investor ready”, that is when we finally open up our Rolodex and introduce them to the potential investors. Even at this stage, we do not only blast every investor in our Rolodex. While working on the presentations, our analysts have carefully gone through our network and identified the appropriate investors to approach. This way we are introducing the startups to the appropriate partners within each VC fund.
We then help manage the entire process of following up with all of the VC partners, help set up meetings and management presentations. Even when the VC has indicated interest in investing, we continue to provide guidance to the founders, helping them understand and navigate through the process of negotiating on a term sheet.
It is when we explain our involvement at every step from start to finish in this complex process that founders feel that we provide massive value to them. For founder who are navigating this process for the first time, this enables them to truly focus on the things that matter to them and be assured that they are being given trustworthy guidance along the way.
Published March 13th 2016 at LinkedIn