Tuesday, May 9, 2023
This is the first installment in a series of blogs discussing how sales teams win more by demonstrating value through taking a consultative approach. This blog was written by Yosen Wang, Analyst.
Why do enterprise software sales teams win and lose deals? Traditional thinking would hypothesize that for high-dollar value, complex software platforms, the strength of their solution drives wins while losses are driven by a perception of higher price points and more difficult implementations, especially compared to less robust, cheaper, point solutions. Does the difference between winning and losing truly come down to price and a perception of being easy to work with? If that thinking holds true, how can enterprise software companies win despite being perceived as more expensive and more difficult to implement than their competitors?
This report explores how in enterprise software deals, winning in these competitive situations is predicated more on demonstrating value rather than absolute cost or perception of effort involved. In order to fully examine this, Anova analyzed findings from thirteen win / loss programs conducted between 2022 and 2023 focused on complex, high value enterprise software deals. Our goal was to understand what winning sales teams do differently to set their solutions apart and ultimately win more. Company names in this case study have been scrubbed and will be referred to as the Client.
In those thirteen programs one of the most interesting findings was that when our Client won, in just over half of those winning situations their newly acquired customer was actually more satisfied with a competitor’s price point. Despite being at a pricing disadvantage, the Client was still able to win because they proved their solution would drive superior value for the customer. Conversely, when we looked at the inverse loss data, 100% of the time when our Client lost customers rated themselves as more satisfied with both price point and expected value.
Figure 1 illustrates one specific situation representative of this finding. When this Client won, satisfaction with its value exceeded that of its top competitor (75% versus 50%), even though it fell behind its competitor in terms of satisfaction with price levels (50% versus 100%). In contrast, when the Client lost, the winning vendor outperformed it in both value satisfaction and pricing satisfaction.
Figure 1 Satisfaction with Price Levels and Value in Wins and Losses Between Clients and Competitors
Additionally, in our Clients’ winning situations, an average of just 48% of prospects were satisfied with their expected ease of implementation. Said another way, more than half of newly won customers expected to be dissatisfied with their selected vendor’s implementation process yet still felt that value of the implemented solution would outweigh the pain of installation.
It becomes clear that the expectation of high value can outweigh pricing and implementation concerns. So, the question then becomes: how can software sales teams become successful at proving their value to their customers?
Click here to read the full case study.