It’s harder than ever to land a new client. Companies are scrutinizing spending amid pandemic-fueled economic uncertainty. Sales meetings are conducted over video rather than in person. Buyers are more sophisticated—60% of them are well-educated on a prospective product or service by the time they make their first engagement. And competition is getting tougher as companies hone their sales strategies to find ways to make lasting inroads with new customers.
These were the challenges cybersecurity software provider CrowdStrike recently faced. The company’s CrowdStrike Falcon platform uses AI and behavioral analysis to offer high-tech protection for customers ranging from banks to retailers. The COVID-19 pandemic upended CrowdStrike’s traditional sales approach. “One of the most important things for us to figure out was how do we maintain and even grow sales in a time where we can no longer work on relationships and be out there selling?” says Mike Carpenter, CrowdStrike’s president of global sales and field operations.
CrowdStrike responded with its Business Value Team, an initiative to help the sales team more efficiently and directly tie the value of the company’s offerings to each prospective customer. This strategy, known as customer value management, essentially puts the onus on the seller to explain the business case for their product: What is the value it can deliver to the buyer? The value could be qualitative or quantitative; it might show how the buyer could save money, boost production, increase efficiency, reduce risk, or create a better customer experience.
“Organizations don’t spend any money without having that business case,” says Jim Berryhill, cofounder and CEO of DecisionLink, a maker of customer value management software. “If I ask you for a dollar, I ought to be able to tell you what you’re going to get for that dollar.”
THE POWER OF AUTOMATION
Customer value management isn’t a new concept. But in recent years, new buying patterns, remote working conditions, and greater scrutiny on investments have pushed the boundaries of this selling discipline. The practice of manually crunching numbers, researching industry metrics, and creating customer pitch decks is no longer a sustainable nor scalable process—especially when hundreds or thousands of proposals need to be delivered annually to hit targets. “I recall sales reps running around the company begging for good quantitative and qualitative case studies for RFP responses, and marketers scrambling for case-study candidates in an endless cycle of tracking customer value,” says Joanne Moretti, DecisionLink’s chief marketing officer.
Digital technology has helped automate much of that process, effectively giving sales reps more opportunities to reach out to prospective customers. Take DecisionLink’s ValueCloud, an automated system that enables and scales business value conversations on-demand. This includes web-based ROI calculators, collaborative business case development, value-realizaton trackers, and about 10 other on-demand outputs—all available at any stage of the customer journey, including renewal time.
CrowdStrike’s use of ValueCloud has freed its 1,200 sales reps from manually inputting key data into Excel spreadsheets or waiting for assistance from a separate team. Berryhill likens this shift to the automation that revolutionized the American car industry. “Automobiles used to be built by hand,” he says. “Fifteen years later, after the production assembly line, there were half a million cars a year being produced in Detroit. That’s what automation can do.”
BEYOND THE FIRST SALE
Berryhill says customer value management is effective beyond simply closing a sale. It can be used throughout the sales cycle, from initial introductions to ongoing sales efforts. That’s useful for companies like ServiceNow, the software as a service (SaaS) giant, which develops workflow-management software. The company’s aggressive six-month product-release schedule means its sales team must constantly update business value assessments to reach new clients and maintain existing ones. Because the ValueCloud platform automates that work, sales reps can quickly prepare those assessments.
Sales reps aren’t the only ones that benefit from these platforms. For instance, ServiceNow’s marketing team now leverages the ValueCloud Web Calculator to drive traffic to their web-based ROI calculator, allowing customers to play what-if scenarios and see bottom-line benefits.
Moretti notes that customer value management can also help to build more durable post-sale relationships with customers. By empowering all commercial team members with value on demand, all boats rise, especially those at renewal time when margin-rich net-recurring revenue is at stake. “The real money in the SaaS business is made after the first renewal,” she says. “In fact, according to ProfitWell, it costs about $1.38 to acquire one dollar in annual recurring revenue. When you renew a client, costs drop dramatically.”
As the pandemic fades, sales reps are likely to go back to scheduling tee times and lunch reservations with prospective clients. But Berryhill says companies and sales teams should draw a key lesson from this challenging market: Value trumps relationships. “Relationships get you in the door,” he says. “But focus on winning customers, not just winning deals, to survive in this post pandemic world.”