By Darrell Woods, Senior Account Manager, Enterprise at Devoteam UK
In the last article we discussed the Proof of Concept and why in reality it might not be universally bad. Today let’s focus instead on its big brother, the Proof of Value.
Proof of Value is sales management’s Holy Grail – the road to which all other wandering sales activity builds. In simplistic terms if I can demonstrate that I save you £5 million pounds a year for the cost of a mere £3 million, why on earth would you not sign? Great. I’ll, err, have two.
Now, clearly the ease with which an organisation can spend has altered considerably, and this is largely a good thing, since even at qualification, a discussion as to why this project would be beneficial helps qualify and indeed may indicate the size of the mountain to be scaled. Sales people are notorious for having happy ears though and this topic in particular is at risk from a few sweeping positive statements being made at the outset and then being left behind as momentum builds to scale the wrong peak (keeping with the rather poor analogy).
All customers are different. This seems obvious. However, there is a danger that the sales mantra around Proof of Value can convince the account team that joining the dots on an identikit Proof of Value is fool-proof. I often hear “well you should know all about us, and this is your specialism” and always bristle because as an external party you never can or will know an organisation as well as the people that actually work there. Proof of Value is therefore about giving your champion what they need to get a decision approved and that could mean a lot more or a lot less effort depending on circumstances. Starting with “we all agree it’s the right thing to do” takes the process considerably less far along than it once did.
Below are eight pointers for debate. I have called them rules but that’s somewhat grandiose. POVs reflect the style and charisma of the participants, but you can help improve the odds of a successful outcome and positive return to all parties from the hard yards that this process requires.
Starting the POV process earlier than feels natural is also the best qualifier.
Rule Number One – use the client’s data
You can get started with industry (preferably same vertical) averages, analyst white papers and the like but I would suggest that customers have stopped paying an awful lot of attention to generic ROI figures. Asking for their own metrics to build into calculations is entirely reasonable and usually quickly establishes that most organisations know some well, have a vague idea on others, and for perhaps a third of the metrics, have no idea what they are or indeed how to begin to quantify them. This is not a bad thing necessarily if you can demonstrate that the project has the ability to gather and track these metrics, and to move the unknown to measurable in the future (itself a powerful justification argument). Here, using a starting assumption based on your experience will have to suffice – it is inevitable that some assumed calculations will have to be used and it allows the client then to play higher or lower with your estimate so they feel they have derived it themselves. Much worse is where your sponsor provides a metric that you feel is under-cooked. All I can suggest is (i) find a comparison with a company they strongly identify with and (ii) respectfully challenge. If they won’t budge then best find a different metric that’s going to make the difference.
Rule Number Two – show workings
Most of the analyst papers don’t do this and are the weaker for it. They don’t need to be super-complicated, rather: a change in this figure by a percentage of X, realised due to Y, will result in a saving of Z.
Let them challenge – at the end of the day the client will only go with figures that they have validated no matter how clever you think you have been in finding new ones. There may be two or more ways of presenting the same argument – together test which is more powerful and relevant right now (as this also changes with time of the year only the most obvious example).
Rule Number Three – have a base framework but only a base
Most of the solutions we deal with are not used for entirely bespoke projects, so having a template works fine, but don’t over-use. The whole feel should be as specific and as unique as you can make it. By all means talk authoritatively about relevant successes elsewhere but apply more to fill holes in the current case.
Rule Number Four – less is more
Better to have 4-6 good ones that stand up rather than 10+ that don’t. Test it – for example, if argument 1 is removed overnight by an outsourcing operation, do the rest still make a compelling case? You should perhaps anticipate that one will be rejected so a commercial case based on at least 4 calculations should be the minimum to be safe.
If the output requires a spreadsheet so complex that that it cannot be explained in a simple walk-through at a good pace then I would suggest you will lose their attention. I tend to convert to a handful of slides as it forces simplifying the presentation.
This is akin to the elevator pitch with the CEO: “we are working with your team on a project to do X, and as a result Y and Z will be the outcomes”. Don’t start at G!
Rule Number Five – own the draft
Sales in 2018 is hard. A good Proof of Value increases your chances of success, a poor one ruins them. Take responsibility – drive the agenda but beware of diminishing returns that come with over-committing to the number of face-to-face interviews. Too many and the purpose gets lost, the attendee may not be properly briefed and quickly can divert off-topic. The POV becomes an opportunity for staff members to have a general moan. Keep control. Document the objectives and check that any inputters are fully prepared.
Rule Number Six – qualitative list: don’t ignore but don’t rely on it
There should be a set of probable soft benefits that you should cite without a commercial figure attached. This assumes you have tried hard to get the client to find a measure and even using your “market assumptions” you have failed. This set rounds out a more human set of project drivers so is important but don’t expect it to help much at Board level for final sign-off.
Rule Number Seven – present revise present revise stop
The POV if well-structured will have made a case for doing something. This is when you are most vulnerable to doing the work for someone else. In my twenty-odd years at Devoteam we have consistently partnered with market-leading vendors. The Proof of Value therefore must tie in to the differentiators of the technology in question and also the strengths of your organisation to deliver and realise those benefits, (I will discuss risks in my next blog). Every client in every industry I have visited in the last ten years has cut back their organisation so that so little “extra time” exists that the alternative of doing nothing has never been stronger. You have to trust your sponsor to drive change and change is hard. Of course, as part of the process meet the decision makers, as high as you can get, but normally the final presentation is not yours to make and don’t embarrass your sponsor by asking to review it. It is not an exact science so know when to stop revising, particularly if the customer doesn’t show signs of taking your ideas and running with them.
Rule Number Eight – be careful with headcount reductions
The POV will present financial metrics for cost savings or increased revenue. This is sufficient; what the prospect does with their resources is best avoided or else you will risk alienating the team who are supporting your analysis.
Ultimately, the POV is a crucial part of all big deals. Starting the process earlier than feels natural is also the best qualifier – do they really want this to happen? There are myriad reasons for not proceeding – your sponsor should be trying to help you make the case compelling and if they are not doing this then something more fundamental is wrong with the sales process.
For prospective buyers I would only say: respect the supplier and their investment in you. You should already be convinced “it’s the right thing to do” and already have made your selection as to how you would ideally wish to proceed. The POV then should be there to support and validate this with your Executive Board. Work collaboratively and avoid the temptation to make the exercise bigger than it needs to be.
Work collaboratively and avoid the temptation to make the exercise bigger than it needs to be.
In my next article I will be considering the risks threatening delivery success and on the responsibilities of Sales to mitigate for the sake of everyone involved!