The Relationship Between the Demand Spectrum and Value Selling

Updated: March 31, 2011

Based on the lifecycle of your particular B2B company and product lines, you may find yourself in one of three distinctive categories that SiriusDecisions created to help define how to best market and sell your solutions.

The SiriusDecisions Demand Creation Spectrum consists of the following categories:

New concept: A disruptive product or service with no budgetary line item within target organizations. New concept marketing and selling is highly evangelistic and requires significant ability around uncovering issues and finding highly influential, highly motivated prospects.

New paradigm: A product or service that promises to retool or optimize an existing process, or solve a known issue more effectively than currently believed to be possible. The replacement (or at the least the augmentation) of a product or service making up an existing line item will generally be required with this type of demand.

Established market: A product or service that is accepted by the majority of target organizations to be necessary and best-of-breed. The market for these products and services is generally served by a few powerful providers that battle with each other for market share.

To reach today's more frugal / skeptical buyer, communicating the value of proposed solutions is critical. During a recent webinar, we received a question as to if value selling / marketing best practices change and which should be the focus based where your company and product are across this spectrum.

New Concept
New concepts are often the most difficult to market and sell, in fact, SiriusDecisions has found that marketing and sales spending nearly doubles for new concept launches versus established market introductions.

Why are the expenses higher? First buyers often don't know they formerly have the problem that you are trying to solve, and if they do, aren't aware of potential solutions, so education becomes crucial. Budgets typically don't exist, requiring an innovator to take hold and champion the purchase to an equally innovative executive team.

Making New Concept sales more challenging than ever, in today's frugal environment buyers have been forced to do-more-with-less, and are struggling with having enough resources to keep up with day-to-day work, much less consider something new. They often don't have the resources to investigate their issues completely, or explore new potential solutions.

Value Selling and Marketing for New Concepts: For new concepts it is most important to get buyers to understand the issues they have, and how these issues can potentially be solved by the new concept.

Much like a doctor diagnosing a patient, you will need to illuminate issues the client might not even know they have, and provide solid proof that a new solution exists that indeed can resolve their ailments.

As the starting point for New Concept solutions, Alinean recommends a focus on the following value selling and marketing tools:

Interactive Assessment Tools: One of the best ways to diagnose issues is with an interactive assessment. Like a survey, the interactive assessment asks the prospect a series of probing questions. Unlike a simple survey, the interactive assessment in real time compares the responses versus "healthy" benchmarks, using on-line results and PDF reports to illuminate where the buyer has already made progress, but more importantly, where they have issues that these new concept solutions can address. Unlike surveys, the interactive assessment goes beyond simple surveys by quantifying the magnitude of the "health" issues in order to create urgency for change. The interactive assessment intelligently recommends solution options and highlights how particular features / options can help address the most serious issues.

Interactive White Papers: Most often with new concepts, white papers are used to educate a prospect as to the opportunities a new concept can address, and provide validation that a solution indeed exists to address the opportunity. Often these white papers include research from 3rd parties to help assure the buyer that the issue is indeed real, and that the solution is indeed a viable way to solve the problem. The issue with these white papers is that they treat all buyers the same, regardless of which industry they are in, their location, their size, what pain points they may be experiencing, their role in decision making, or their stage in the buying cycle. Interactive white papers represent a more personalized option, fine tuning the white paper based on the users' precise profile - delivering one-to-one engaging content and advice.

New Paradigms
New paradigms offer a new or innovative way to address an already recognized opportunity. In this case, the buyer is aware of the problem and of legacy solutions that have been used to traditionally address the opportunity, but not of the novel way you are proposing to solve the problem, and the advantages that this new paradigm represents over legacy solutions.

For example, the new paradigm represented by cloud based services versus traditional premise based solutions, where the opportunity is well understood, but the novel way to address the computing service is not totally understood.

For new paradigm, the buyer already knows about the problem being solved, so they most often need education that there is a better way of solving it. But in today's frugal environment, this can be difficult, as it's often easier for buyers to "do-nothing" than take a chance on a new paradigm. Buyers often need to be convinced that there is a quantifiable financial savings/ value to make the paradigm shift, and compared to other investment options, that the new paradigm represents a low risk, high return, and fast payback use of funds.

Value Selling and Marketing for New Paradigms: For new paradigms, the key is to demonstrate that legacy solutions are leaving significant savings / upside benefits on the table, and that there is financial savings / gain to be had via the new paradigm. The key is to highlight how the new paradigm retools and improves existing processes, or provides a lower cost of ownership / superior solution.

ROI analysis /TCO Comparison Tools can be used to justify new paradigms, helping buyers quantify the current ownership costs for legacy solutions, and the savings / incremental benefits of the new paradigm in comparison.

Established Categories
Established categories already have a well defined market need and established solutions, with a fiercely contested and crowded marketplace. Buyers seeking solutions in established categories usually know the problem that needs to be solved, but might not be clear on how important it is to solve the problem, or what differentiates the different solutions and providers. Vendors in established categories struggle to differentiate their solutions and compete beyond price.

Value Selling and Marketing for Established Categories: For established categories, feature / function differentiation is paramount, and moving beyond initial purchase price is key.

ROI Analysis Tools: To differentiate features / functions, ROI analysis can be used to tie features to business savings / impact, quantifying bottom-line value.

TCO Comparison Tools: To advance pricing discussions, TCO comparison tools can move the discussions beyond initial price comparisons and help buyers understand the true cost of owning each solution being considered. The TCO comparison for select vendor options, tallies the initial purchase price and setup and delivery labor and costs, as well as the on-going management, support, evolution and retirement labor costs and fees over the useful life.

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