It has been my experience that most customers will pay for well-defined value. What they won’t pay for is a product or service with little or no value proposition or market research to support the proposed cost. One proven option to help reverse discounting trends is obtaining a commanding knowledge of operational and economic benefits your products or services have provided to other customers in similar operating environments. This information being made available during the initial discovery sessions with the customer establishes an expectation of delivering value. When proposals are delivered citing operational and economic benefits derived from prior customers in similar operating environments, it moves the discussions from a technology decision to one of providing economic benefit.

Sales organizations that have this information establish a competitive differentiator that is not easily duplicated by the competition. Having a sales and marketing culture focused on educating customers on the operational and economic benefits of their products and services have proven to dramatically reduce sales cycle and improve close ratios, directly resulting in greater revenue and margin contribution. Moreover, having the operating discipline to follow up after the implementation and validate the operational and economic benefit provides both the customer and your R&D, marketing and sales organizations with the information needed to repeat this proven process for successful sales pursuits in the future.

In the end, the customer is better served in a closed-loop system where you first deliver and then capture the economic benefit to the customer. It establishes a systemic process that guides strategic planning, product development, budgeting, go-to-market planning, education and even compensation — all geared to establishing a sales culture of providing measurable benefit to your customer and your customer’s customer.

With sales and marketing professionals equipped with this information, your pricing will be based on anticipated economic benefits instead of a price list, and your customer is much more likely to agree with it. Negotiations are a part of any sales process, but having the details to back up the pricing will prove valuable to you and the customer. Not having this information provides little defense to the professional buyer who is professionally trained to underpin your pricing model.

One pricing principal that holds true is this: “If you can’t price your value, all you can price is your cost.” Having the ability to price your value is a reliable vehicle to accurately predict future revenues and margins.

Let us know the issues you are facing, what questions you may have and thoughts regarding this blog. You can email us at blog@alchemygroupinc.com.

One of the issues facing sales and marketing organizations today is price and margin erosion. While the days of relationship selling are not over, the relationship between client and sales professionals is quickly migrating towards business and financial analysis and away from the feature-function selling processes of the past. Having adequate skills, training and experience to understand the economic benefit of your products and services breeds confidence throughout your organization — confidence that is needed in the sales and marketing teams to represent information with business acumen to influence economic buyers. Also required are the repeatable processes and economic benefit analyses that will enable the sales professional to convert features and functions into economic benefits in a customer’s specific operating environment.

Suppliers continue to unleash very powerful and complex solutions into the marketplace with the inherent expectation that the customer will comprehend the anticipated economic benefit. Buyers are not typically business or financial analysts, so the combination of complex solution education and the inability to complete the financial analysis will inevitably extend the selling cycle for most suppliers. Having a well-trained team of professionals to address the needs of the customers is critical.

A global research effort conducted by Alchemy Group confirmed that over 70 percent of buyers are required to create financial justification for procuring technology.

We were surprised to learn that only 60 percent of the buying professionals surveyed had internal or external resources who could help justify their financial analyses. This is an excellent opportunity for suppliers to fill a critical business need with tools, pre-sales resources and independent economic benefit analysis to speak in economic terms to the economic buyers.

While commoditization is undermining pricing and killing margins, something that is killing margins even quicker is that most sales organizations have no defense available from price erosion. If you can’t price your value, all you can price is your cost. If you look hard enough at what is happening to the margins, you can trace it back to what happened during the sales process. In most cases it is the inability of the sales professional to defend value.

This vulnerability encourages the sales professional to “discount until the customer buys,” which wipes out any reasonable margin and undermines revenue. Sales leaders who are experiencing this trend have little choice but to continue this margin eroding process without the skills development programs, coaching and economic benefit analysis to set a new course.

Establishing a sales and marketing culture that is focused on delivering value will provide the insight and the confidence to defend the value. Anything less will undermine any attempt to protect revenues and margins.

Sound familiar? Let us know the issues you are facing, what questions you may have and thoughts regarding this blog. You can email us at blog@alchemygroupinc.com.

Many organizations that have participated in reference activity rarely see the benefit of sharing intimate information with suppliers, much less the public at large. Historically, content developed around the subject of business value lacks the forensic detail and independent validation to be relevant to existing or future customers. All too often, marketing organizations are far too quick to settle for a nice story, rather than providing research the customer can use internally to protect budgets and justify future expenditures.

We have learned the recipe for navigating these conversations and encouraging customers to participate is very straightforward — give them something credible they can use to promote internal success, protect existing budgets and secure future expenditures, and they just might let you share some of the information in a public format. Anything less and they may reluctantly comply with your request to use them as a poster child for your products and services. The former will enhance your relationships with your customers and be an added benefit to your customer reference program.

It is ultimately the customer’s decision as to how this forensic economic information is repurposed, both inside and outside their organization. In cases where budgets are under attack, the strategic decision may be to provide private research to give your customer the support required to secure funding for future expenditures. In this case, the strategic decision is to place the protection of future budgets above reference activity and product promotions.

This is sometimes the case, as not all research efforts have a positive outcome. As part of the initial qualification process, you should validate several key parameters before fully investing resources, including communication guidelines that may restrict the collection or distribution of this information. Alchemy Group normally secures a bonded non-disclosure agreement recognizing the potential risk of this information moving outside of the customer operating environment. Until the results are confirmed and validated by the customer, the use of this information is off limits for public distribution.

The economic benefit you provide is best defined by your customer and validated by an independent third party. Your customer will need to provide access to information that will provide insight and details, before and after the sale, that allow accurate financial calculations. These calculations should then be reviewed by a business analyst, financial analyst and an independent auditor to ensure the integrity of the research. Finally, you need the customer to sign off on the research.

It is not the voice of the market analyst that will enhance your customer reference program. There are many market analysts today who are quick to step in front of the customer to state what they think the benefit of your products were, as if their interpretation or translation is of more value than the unfiltered opinion of the customer.

Only with the voice of the customer (VOC) will you be able to capture the intimate details and accurately apply this information at sufficient depth. The definition of value does not get any clearer than using the VOC to validate not only the formulas to accurately assess the economic impact, but the operating scenarios that allow the entire story to be told on behalf of the stakeholders. Why would you or your customer settle for anything else?

Let us know the issues you are facing, what questions you may have and thoughts regarding this blog. You can email us at blog@alchemygroupinc.com.

In a recent survey conducted by Alchemy Group, we learned that most buyers are making fundamental changes in the evaluation and selection process specifically as it relates to operational and economic benefits. This change will force many sales and marketing leaders to re-tool their organizations and develop tightly integrated sales and marketing best practices emphasizing the economic benefits available to customers.

This is the front edge of an unusual storm pattern that most client-facing organizations are not prepared to confront. In our opinion, this is a game changer. As the customer becomes more focused on the economic benefit and moves away from features and functions, sales and marketing functions will increase in complexity. It will require expert navigation skills to reach the economic buyers, along with an independent economic benefit analysis to develop credible financial arguments — most of them tailored for specific customer operating environments and vertical markets.
With the complexities inherent in most buying cycles, likely prerequisites to navigate this change include having repeatable sales processes to reduce the cost of sales and the business acumen to communicate effectively with financial buyers. A challenge for most organizations is educating the sales and marketing teams to compete on value instead of features and functions. The more adept your sales professionals are at being subject matter experts, the more success they will have at filling the pipeline with qualified prospects and improving the close ratios. The selling environment today demands an effective engagement process to capture new business revenues. The degree to which your sales organization is lacking these attributes is the same degree that your current engagement processes will require some changes.

The combination of a slowing economy, little economic research, lack of business acumen, low morale, atrophied time management skills and the lack of repeatable sales processes are not uncommon conditions for organizations just entering this storm pattern. It has been our experience that these attributes serve as a bellwether for a high degree of variability in the revenue forecast and an inability to meet quarterly revenue objectives.

We anticipate a fundamental transformation of most sales and marketing organizations in the next five years. Knowing what to do and in what sequence will largely define the outcome for these organizations. Alchemy Group acts as an independent and experienced resource to help these organizations navigate to safe harbor and identify the shortest time to benefit.
Let us know the issues you are facing, what questions you may have and thoughts regarding this blog. You can email us at blog@alchemygroupinc.com.

For more information or to download this document, go to http://www.alchemygroupinc.com/category/research/bva/

The company is experiencing steady business growth, both organically and through mergers and acquisitions. In particular, the growing interest in cloud computing and hosted IT services is escalating the demands on Symantec’s data center infrastructure to accommodate those services. Simultaneously, the company is inheriting the real estate holdings of acquired businesses as it continues to manage the impact of its carbon footprint on the environment. Symantec’s software-based approach to green IT offers organizations various tools for streamlining the IT infrastructure and driving energy efficiencies to reduce energy costs. In addition, the company’s longstanding commitment to environmental stewardship is spurring actions on other fronts including facilities consolidation and travel reduction to help Symantec achieve its green objectives.
Barriers
Symantec has endeavored to balance growth in its facilities, application hosting, and data storage services with the mission to contain its global energy consumption. Efforts to find the balance between corporate growth and reducing overall carbon dioxide emissions continue to evolve.
The Solution
Seeking operational efficiencies and lower costs, Symantec implemented a series of steps that leveraged a number of its own data management technologies. The company began consolidating its data centers worldwide to achieve significant savings in facilities and data center operations. The IT infrastructure team harnessed virtualization technologies to manage server growth and related energy consumption. To reduce its data storage footprint the company leveraged Symantec NetBackup and NetBackup PureDisk for data deduplication; Symantec Enterprise Vault for single-instance email archiving; and Veritas Storage Foundation and Veritas CommandCentral for optimal storage utilization. In addition, Symantec also deployed a custom power management profile on company PCs to eliminate energy waste from unused devices.
Benefits
As a result of its ongoing green IT efforts, Symantec is achieving substantial operational and economic benefit. Alchemy Group conducted a TOEI™ analysis and projected IT-related business value totaling more than $19.5 million between July 2007 and December 2012, in addition to $959,000 in facilities energy savings from fiscal year 2008 to fiscal year 2010 (Chart 1).

For more information or to download this document, go to http://www.alchemygroupinc.com/category/research/bva/

For more information or to download this document, go to http://www.alchemygroupinc.com/category/research/bva/

For more information or to download this document, go to http://www.alchemygroupinc.com/category/research/bva/

For more information or to download this document, go to http://www.alchemygroupinc.com/category/research/bva/