CIOs want vendors to demonstrate the bottom line

In my role as an analyst I am shown a great many marketing pitches by software vendors. What continues to surprise me, but should not, is not only the variable quality of these but how certain themes recur.

A common mistake is to talk about the features of the product without clearly explaining the value of the solution to the customer. Since software vendors are full of technical people, it may be tempting to describe the coolest technical features of the product, but unless the audience you are actually selling to is technologists, then this is a mistake.

Saying that a customer managed to get their marketing analysis query down from 10 minutes to just 30 seconds is doubtless very interesting, but what does it actually mean in real terms? If the query was something run once a month in batch, then probably not much. If it was a real-time analysis that helped the firm decide what kind of products their reps should try to sell to a prospect, maybe quite a lot. As a buyer it is important to understand whether a product meets a need that the buyer has, not whether the product is, in abstract terms, better than another.

In truth, there are only three types of benefits that are likely to excite a business buyer: something that reduces their current costs, something that increases their revenues, or something that reduces their risk. If the product that you are selling cannot be clearly tied to one or more of these three things then you are probably going to have an uphill struggle.

If only a limited number of vendors manage to explain what benefits their product bring to the customer, even fewer go further and try to quantify those benefits in monetary terms. Admittedly this is tough since the benefits that one customer receives from a successful implementation may vary dramatically from those of another, especially if customers are in different industries or are of markedly different sizes. But put yourself in the shoes of the buyer. Which is the more convincing pitch? “Product A helps you reduce your costs by enabling better decision making” or “In an independently audited study of five of our customers, average cost reductions of equivalent to 0.5 per cent of total company revenues were achieved; the average net present value of the projects was £4m, with internal rates of return ranging from 45 to 233 per cent.” Which pitch do you think more credibly represents a situation where customers actually saw some real benefit?

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