Things I’d Like to See Go Away – Unrealistic ROI and TCO Calculators

Let’s face it, customers care about Total Cost of Ownership (TCO) and Return on Investment (ROI).   These figures are a key part of most business cases that are developed to make a purchase.

And, the calculations are complex.  Actually, that is wrong.  The calculations are not complex, but understanding what to include in the calculations is not always obvious.   To help with this, many vendors create ROI and TCO calculators.

Photo by rawpixel.com from Pexels

Photo by rawpixel.com from Pexels

Unfortunately, the vast majority of these are incomplete.  And that is why I would like them to go away.

Try for yourself, search for ROI or TCO calculator.  Find one on a vendor site.   Look at the range of inputs.   Most of the ROI versions I see only talk about what the potential returns are–they rarely if ever include any details on the investment.  And those that do, often only look at the cost of their solution–not the added costs to the business (administration, training, etc.).  True, with SaaS, some of these costs (Installation, Configuration, Hardware acquisition) are eliminated or minimized, but only talking returns is not ROI.  Similar things happen with most TCO calculators.

Ask your customer if they can take forward a business case that does not outline the investment.   The answer is  pretty obvious.

What Buyers Can Do To Stop This:

Let’s face it, you could use help building your business case.  But when you see a fake calculator, immediately question the company about some of the costs that you know are part of your story.  Ask them why they don’t include the ability to add those to the calculation.

And highlight for them that delays in your business case delay—potentially forever–decisions.

What Vendors Can Do:

Be more transparent.  If you are providing a calculator for potential returns, call it that.  Don’t call it ROI.   Maybe provide that on your Web site, but offer a more complete ROI modeling tool for sales interactions.    Work with existing customers to understand the business cases they developed and then use that to flesh out the range of inputs for your ROI and TCO tools.  You might also discover some other areas of differentiation.

There are cases where ROI is difficult to determine, but there may be other approaches to the business case–take ownership of making business case easier and provide your customer with tools that are complete and not slanted to you.  That will build trust and accelerate deals.

To learn more, please visit: https://blogs.gartner.com/hank-barnes/2018/05/22/things-id-like-to-see-go-away-unrealistic-roi-and-tco-calculators/

The 2018 Eastwood Product Marketing Trend Report

The 2018 Eastwood Product Marketing Trends Report highlights where technology companies are currently focusing their product marketing resources and going-to-market efforts. Product marketing is a large job with many responsibilities and this report will help you understand where technology companies are focusing their product marketing resources.

* See how you compare with your product marketing peers

* Learn how product marketing in your industry compares to others

* Rethink your product marketing priorities

The top five product marketing focus areas include:

1. 71% Positioning and messaging

2. 69% Working with cross functional teams

3. 63% Sales tool development

4. 50% Learn key customer insight

5. 41% Product launches

To learn more, please visit: https://eastwoodsa.com/product-marketing-report/

Tired of poorly run meetings? Try these 7 practices from PMO blackbelts

If you’re like most managers, you live in meetings most of which are run poorly. No clear agenda. No actions items with due dates. No accountability. Just open discussion with some attendees who really don’t need to be there but may lob “grenades” into the meeting to get attention. Sound familiar? There is a better way. Some of our clients have modeled this exceptionally well in PMO or “program management office” meetings. The PMO model can be applied to any cross-functional project or program from marketing campaigns to product development to executive sessions. Here are seven practices we’ve found ensure great meeting outcomes:

Establish and maintain a clear purpose. People meet for a variety of reasons – to disseminate key information, make decisions, assign resources, solve problems, mitigate risks, brainstorm possibilities, etc. Whatever the reason is for your PMO meeting, we strongly recommend you remind people every single time you meet. That’s right. Every time. This practice prevents newcomers from hijacking or disrupting your meeting, and sets the boundaries for the topics under discussion.

Establish roles and minimal attendees. Most meetings have too many players. We recommend the “RACI” model with “Responsible” player being the one who owns a function or key initiative being covered. “Approver” is usually a director, VP or C-level executive who approves what the Responsible player recommends. The “Contributor” offers necessary input into any action or decision to be made. And “Informed” are the ones who just need to be told the final outcome. We recommend at the most 7-8 players in a meeting.

Move deeper discussion offline: you’ve all experienced meetings where someone brings up a topic that becomes a “rat hole” in which the team attempts to solve a problem as a group.  It might be a very valid topic worthy of deliberation but certainly not by the broader PMO team. The better approach is to interrupt after about 3 minutes (use a 3-minute “hour glass” like timer) and clearly articulate the problem statement or item needing deeper discussion. Call it a “parking lot” item for now. Use RACI to clarify who must participate in that topic, assign a deadline, and have the Responsible person report back no later than the next PMO meeting.

Surface risks to mitigate them: the practices above may feel like a “checkbox” approach to project/program management meeting which may inadvertently discourage quality discussion. Moving discussions offline must not come across as squelching the team’s valid concerns. We recommend the leader go around the table asking each person to speak up on a risk they see that requires a mitigation plan. Ask for their recommendation too.

Use a consistent reporting format: a project/program management type meeting is specifically meant to detect and manage risks so that the team can achieve the committed goals on time, on budget. We recommend a dashboard with red, yellow, or green status indicators for each key tactic. Have measurable criteria to determine these conditions. Items that are yellow or red should require the Responsible person to explain why the item is this color, what the plan is to get the item to green, and what help they are requesting of the team. The best PMO leaders will work ahead of the meeting to find out which item is turning yellow/red and coach that responsible owner to work diligently to manage the risk.

Be a strong, disciplined facilitator: first off, have a leader for the meeting! Ever been in a meeting where there’s an awkward silence as everyone is trying to figure out who is running the meeting? An effective meeting requires both team cooperation and a strong leader. It’s helpful upfront to tell the team you might have to cut discussions short, note the item for “parking lot”, and setup an offline meeting, if needed. The team also needs to support the leader by staying on topic, and being clear on when an item needs discussion offline.

Use a good web-based tool like Wrike or Jira:  the PMO meeting is just part of a broader process such as product development, product launch, marketing campaigns, strategic planning, etc.  Tools like Wrike and Jira offer powerful yet easy to use ways of tracking action items, owners, due dates, and dependencies. They also facilitate team collaboration in between meetings with threaded discussions.

We have many more tips to offer you but these are the top seven tips. What practices have you found that are particularly useful?

To view the original article: https://www.aventigroup.com/single-post/2017/11/20/Tired-of-poorly-run-meetings-Try-these-7-practices-from-PMO-blackbelts

These Four Steps Distinguish Good Win/Loss Programs From Great Ones

Most organizations love the idea of a win/loss program. They imagine a process by which they can better understand their buyers’ evaluation and decision-making approaches, track the effectiveness of their sales and marketing efforts, and uncover useful insights about the competition.

As advertised, leading win/loss programs provide all of that and more. However, their effectiveness and impact vary by organization. A number of variables determine program success. Executive-level ownership and participation, sales leadership endorsement and sales team accountability, and a strong and influential internal program manager make a world of difference.

Assuming all of these things are in place, the most successful programs are the ones that take immediate and measurable action on the insights gained by following these four steps:

Prioritize actions

Win/loss programs yield a lot of great feedback and suggested actions, so much so that it’s nearly impossible and counterproductive to follow each lead. Those who really understand the value of the program also understand the importance of prioritizing the suggested actions. Often, they will do so by asking themselves:

  • Which of these actions is aligned with our corporate goals and objectives?
  • Which of these actions will make the greatest short- and long-term impact?
  • Which of these actions will help to address an issue that has the potential to knock us off course and negatively impact our business?

Set baseline metrics

Once an action has been prioritized, it’s important to set a baseline metric. This metric will be used later to measure the success of the action taken. The questions to ask are:

  • What metric can we use to measure the impact of the action we are about to take?
  • Using that metric, where are we today?

Take action

Now that the action has been identified and a baseline metric has been established, it’s time to move on it. Aside from a baseline metric, successful actions have an owner, a timeline, and accountability. Before taking action, the following questions must be asked:

  • Who is going to own this action?
  • How will this person report on the progress associated with the action?
  • By what date will this action need to take place?
  • On what date and in what forum will the owner report on the completed action?

Measure

Now that the action, either in its entirety or in part, has been completed, it’s time to measure once again. Here are the questions to ask:

  • When is the right time to measure again?
  • How does our metric compare today to when we first took action?
  • Besides the action taken, were there other factors that impacted the metric?

This simple approach to taking action and measuring results is the biggest difference between good programs and great programs.

Happy hunting!

To view the original article, please visit: http://www.doublecheckresearch.com/news/create-article-2

Why the Product Team Must Own Pricing

Author: Mark Stiving, Pragmatic Instructor

Who should own pricing? When I ask students this question, it almost always evokes emotion. Some people respond confidently, while others are more sheepish. And a lot of people think their companies are doing it wrong.

Before we answer this question, it’s important to define just what it means, because there are so many pieces to the pricing puzzle. For example, someone must decide which pricing model to use. SaaS or perpetual license software? Do we price by the seat, the gigabyte, the transaction or something else? Usually, executives decide this, or at least participate in the decision.

Another aspect of pricing is to negotiate discounts. In most companies the sales team does (and should) own this part of pricing.

However, when most people respond to the question, they focus on who is responsible for setting the price, which involves determining the list price and often establishing guidance for discounting. For now, let’s agree with most people. We ask, “Who owns pricing?” But what we really mean is: “Who sets the price?”

Using this definition, the answer is obvious: It must be someone from the product team. These are the people in the company whose job it is to know how much value the product delivers to buyers. And the person setting the price must know value to put in place value-based pricing (VBP).

VBP is the basis for all profit-maximizing pricing strategies. It means we charge based on what buyers are willing to pay, which is a function of the value buyers receive. The product team is uniquely positioned to know that value and determine how much markets are willing to pay.

How do customers decide their willingness to pay? They make their decision using one or both of the following methods: value in use or value in choice.

Value in use is when customers estimate the inherent value they get from buying a product. They will pay some percentage of that value to buy the product. For example, how much would you pay for gas if you’re in the middle of the desert, your gas gauge is on empty and you see a sign that says: “Last gas for 75 miles”? Probably a lot. That is value in use.

Value in choice is when buyers compare your product with an alternative. If they decide they get more value from your product, they will buy it. Imagine a busy intersection with a gas station on each corner, and your gas tank is empty. How much would you pay to buy gas at the most convenient station if all the other stations are charging $2.25? Probably much less than what you would pay in the desert. That is value in choice.

To use VBP, a person must understand the value that the markets and market segments receive from using your products. They must be able to put a dollar value on it. Even more challenging, they must understand value in choice. This means knowing competitors, their prices, how they are different (better and worse) and how much buyers value those differences.

Who inside your company understands this value? The product team. They know the competitive landscape and understand how your buyers make decisions. And because they must understand all these things, they should be responsible for setting prices.

Your finance team should not own pricing. Finance has the desire—but not the knowledge—to set prices based on value. Although they care about margins and understand costs, finance people don’t know the value their products deliver and they don’t know their competitors’ products. If finance sets prices, the only method they can use is cost-plus pricing.

You might argue that sales could set price. After all, great salespeople are value-focused; they try to understand value from each buyer, which aligns with VBP. However, they have two strikes against them. First, salespeople have the incentive to close deals quickly, which often means dropping the price. Second, they don’t see the entire market, only their specific customers. Someone needs to aggregate this information to provide companywide guidance.

An additional reason the product team should set prices: They determine what the next product will look like and which features have highest priority. Whoever makes that decision is who I want to own setting prices.

Why? Because companies should strive to make products that buyers value more. To do that, they must choose the best new features, ones that add more value to their product in the minds of their buyers. If product management owns setting prices, they are in that exact mindset. They get to decide which new capabilities might give them the ability to charge more.

What is different if finance sets prices? Again, the only way finance has to set prices is cost-plus. They take the cost and add a margin. When deciding whether to add a new feature, product management then would only need to determine if buyers are willing to pay more than the cost plus the margin. If the answer is yes, then put the feature in. If the answer is no, omit it.

This would be especially onerous for software companies. The marginal cost of manufacturing any new feature is near zero. This would allow product management to say yes to virtually anything and still meet that rule. The product manager has no incentive to find new high-value features. The company won’t charge for them. Hence, the company ends up with only slightly better products.

If sales sets pricing, product management doesn’t need to understand the value of their product. When deciding which features get priority, they would just rely on sales. In fact, when sales sets pricing, they become the de facto product team. To make it worse, each new capability sales asks for will be based on direct customer requests. It’s a surefire way to ensure that the company only builds incremental innovations.

The right answer is to let product management set the price. Their goal should be to choose the price and product features that maximize the profitability of the product. They can trade off the importance of customer requests against the value of brand-new capabilities. They have control of both important levers, price and product.

If you want to maximize profits, the product team is the only section of your company with the knowledge and incentives to effectively implement VBP. More important, if you want to create more valuable new products, the people who define the next product should also be in charge of setting its price.

To view the source article, please visit: https://pragmaticmarketing.com/resources/articles/why-the-product-team-must-own-pricing

The business of telling stories (and how to do it)

If you’re in the business of marketing or selling products, then you’re also in the business of telling stories.

Investor and entrepreneur Ben Horowitz once said, “You can have a great product, but a compelling story puts the company into motion.”

As marketers and sellers, we put the product story to work every day. We use it to forge connections with prospects. We rely on it explain why our product matters. And we leverage it to grow our share of today’s scarcest resource, attention.

Stories are powerful. Studies have shown the profound impact that stories have on our brain. Stories not only engage us emotionally but also help build trust and even inspire action. Indeed, B2B buyers are nearly 50% more likely to purchase when they see personal value in a product.

When we rewrote our sales deck earlier this year, we did so by putting our story – not our features – first. And the results we saw confirmed the power of storytelling to drive business outcomes.

But, if you’re not sure what it means to tell your product story, this is easier said than done. Don’t worry, though – we’ve got you covered.

5 steps to telling an effective product story

1. Ditch the list of features and the features matrix.

We’ve said it before and we’ll say it again: Prospects don’t care about your product. While your product might be technically impressive, simply calling out your features doesn’t tell prospects why they should pick your product.

We’ve all seen feature matrices like the one below. You find them in product overviews, in sales decks, and even in reports and white papers. Look at it for a minute.

example feature matrix - product story

How does this feature matrix make you feel? Excited to jump into the product? Probably not.

And that’s exactly the point.

A feature matrix shuts down rather than invites conversation. It overwhelms prospects with details about your product without providing any real clues as to the value they might get out of it. And relying on prospects to figure out why your product matters rarely wins you the deal.

2. Put your product story in context.

All great product stories start with context. In order to grab and hold prospects’ attention, you need to establish what’s at stake. You need to show prospects that you intimately understand their situation and know exactly what it will take for them to come out on top.

More than that, naming stakes enables you to answer the question, “Why now?”.  You create urgency by connecting those stakes to the highly positive outcomes prospects will (only) achieve by using your product. Remember, how prospects feel – including the anticipation of professional and personal rewards – impacts how likely they are to purchase.

We use our discovery deck – the deck we present during our first sales call – to establish why our product matters for modern sales and marketing teams. And one of the ways we do that is by pointing out how buyer behavior has changed and the need for sales to get smarter, faster.

changing buyer behavior - product story

Putting our product in context shifts the conversation from why our product is a nice-to-have to why it’s a must-have. And the highly positive outcome we’re pitching? To win in today’s buyer- driven world, businesses need real-time insight into the content that’s fueling the sales funnel.

3. Understand why customers hire your product.

Your customers are your best resource for getting to the heart of your product’s value. That is, what problem do customers solve with your product? And what makes your product the right solution for the job?

One of the tools we use to answer those questions is “Job Stories.” Job Stories focuses on capturing situations, motivations, and outcomes. The result typically looks something like this: When [situation]happens, customers want to do [job or motivation] to accomplish [outcome].

Here’s an example of how Salesflare describes the job that customers hire their product to do. The job story below might read, When sales reps are closing deals, they want customer data at their fingertips, so they have full visibility into the relationship.

salesflare product story job stories

When it comes to selling software, many times the only thing your customers share in common is the job they want to get done. And knowing why customers hire your product provides invaluable insight into what stories and what messages resonate with them.

A good product story weaves together what your product does with why your product matters.

4. Repeat your product story often.

Once you get started telling your product story, it’s often tempting to continually invent shiny new ones for different scenarios. Resist the urge to do so.

Why? Because the secret to good storytelling is consistency.

You need to tell the same story over and over again to actually be heard. The power of repetition is the bedrock of marketing principles like the “Rule of 7” or Thomas Smith’s Successful Advertising.

Take a look at Intercom’s story. Their mission is to make business personal again – and they tell their story in blog posts, on landing pages, at live events, and elsewhere. While they might repackage ideas for different mediums, the core message stays the same.

intercom product story landing page

When a customer purchases your product, they end up buying part of your story. That is, your product becomes part of how they realize the story you’ve just told. And it is to your advantage to tell your story wherever and whenever you can – throughout the funnel and across channels and formats.

5. Measure, learn, and iterate.

While consistency might be key, it doesn’t mean you can’t improve upon what’s been said before. In fact, the goal should always be to refine your product story and to bring clarity to what’s at stake. But you need to do so with a plan and data in hand.

You can measure the power of your product story in a number of ways. Methods we use include getting user feedback, conducting A/B tests, and measuring content performance. For sales content, we regularly use metrics like time spent per page, average percent viewed, and dropoff rate to keep a pulse on engagement.

DocSend sales content metrics - product story

We’re constantly testing whenever and wherever we can. Just like your product, your product story can and should evolve. Actively optimize how you tell your product story, what words you use, and where you feature what parts of your story.

Remember, a good product story starts and ends with your customers. And they – their preferences, attitudes, and emotions – are absolutely subject to change.

Crafting a good product story is hard

It’s not easy to come up with a product story that’s just right the first time around. In the beginning, it often feels like a shot in the dark – and, sometimes, it is. It takes time to move past the what and how of your product and to really nail why your product matters.

Our best advice? Take the time to get to know your market, your customers, and even your product. And make that learning process part of what it means to tell your story. We’ve seen incredible lifts from sharing our product story, and we rely on feedback – both critical and positive – to continue telling a story that’s meaningful for us and for our prospects.

How have you leveraged storytelling? And what’s worked best for you?

To view the source of the article: https://www.docsend.com/blog/5-steps-telling-product-story/

Boost enterprise sales with leads from product trials

A majority of SaaS companies that I have built products for have brought their products to market with a sales led G2M motion. The sales reps would source new customers through outbound efforts and engaging their professional network. This method was great when we were trying to find product-market fit as the sales reps were close to the customer and we had easy access to interview the customers we engaged with.

However, as our business grew we ran into challenges efficiently scaling our G2M efforts. We did all the right things. We invested more into marketing and reduced the size of the sales team and as a result gained some customer acquisition cost (CAC) efficiencies. Marketings goals were to get more customers speaking with sales reps. Once the deal was done, the customer then got access to our product.

We thought we had it all figured out, but a new problem emerged. There was a growing gap between what customers thought our product could do for them and what it actually did. As a result we now struggled with keeping our top-line ARR as our customer churn rates were too high. We were stuck in the SaaS grind of acquiring customers knowing that we couldn’t serve them well. We beefed up our customer success organization, trying to patch the revenue leak and ended up increasing our operational costs to deliver our product.

Many SaaS companies find themselves in this same situation and I want to share there is hope.

To get out of the SaaS grind, you must address the customer expectation gap by getting customers into your product earlier in the buying cycle. This is achieved by offering either a free trial version of your product, or providing access to your product during a POC period.

To make this transition both effective and efficient from a cost perspective, you need to update your marketing and sales operations to account for leads who are in a trial period by:

  1. Mapping buyer journey to sales process

With your current process, you track a lead’s lifecycle in your marketing automation and CRM systems. Using this setup, you set the following lead statuses along the way; Lead, MQL, SQL, Opportunity, Customer. You now need to incorporate a new state; where the lead is in a trial state within your product, either having started a free trial, or have been provided access to a POC.

The first step is to decide collectively between your marketing, product and sales team how to categorize a user who has signed up for a trial. Should they be considered a lead? When should sales engage? When do they qualify as an opportunity?

Given you are aligning the activities across multiple departments, it’s recommended you start by documenting your buyers journey and how it aligns with your sales process. For each stage in the process, who is responsible for what activities. With this shared understanding you can now paint the process together on how to incorporate trial users into this process.

Find below a simplified example where each stage in the buyer journey is mapped and how the trial users can be incorporated. The goal is to align your teams and provide visibility into conversion rates at each stage to know where to optimize the process.

Example: Buyer Journey mapped to Sales Process

2. Measuring Product Qualified Leads™

Not all trial user are ideal candidates to become customers and as a result you don’t want your sales teams to engage deeply with every user who signs up for a trial account. Just as you had implemented the concept of Marketing Qualified Leads based on the person’s demographics, firmographics and marketing content consumption, you now can create the equivalent based on the features they use in your product.

Your product’s role just got much more important to the sales process.

You now want to define the set of features your customers can use to realize value, also known as the “first mile of product”. When your trial user adopts specific features, you can then categorize them as a Product Qualified Lead™. When trial user reaches the defined threshold of product feature activity, you can then notify your sales team to engage.

3. Creating the Product & Sales Handoff

This step is where your planning meets your execution. Now that your teams are aligned on the process and you’re able to use your product to identify qualified leads, you need to make it easy for your sales teams to know when a trial user is ready to buy.

In your CRM, you need to have the information you sales teams need to properly engage with the lead. In addition to the demographic and firmographic information on the trial users, you will want to provide your sales team with what features they used in your product. Triggered alerts can be sent to lead owners when trial users become product qualified and specific views can be created to help prioritize their engagements.

Armed with this information, your sales team now have a more complete picture of what challenges the prospect is looking to address with your product and can offer the best package to fit their needs. You have also allowed your customer to realize the value of your product first-hand and set value expectations to make them a happy life-long customer.

In this article, we cover the marketing and sales operations changes to incorporate a free-trial or POC within your enterprise sales process. For a complete guide to using your product to accelerate growth, download a free copy of our book Mastering Product Experience.

To view the source, please visit https://intrinsicpoint.com/boost-enterprise-sales-with-leads-from-product-trials-aa9a5f87e5c4