I remember the first time I visited West Point like it was yesterday. I was still in high school, and a dear friend invited me to see her brother graduate. To make this even more special, I was lucky enough to hear the great communicator, President Ronald Reagan, deliver the commencement speech.
Two things immediately strike you on a visit to the institution: first the idyllic location and beautiful grounds along the Hudson; and second, the discipline of the student soldiers who march in unison into the stands before each game.
Randy Perry, head of IDC’s business value practice, came of age in such a disciplined environment as a West Point graduate. He brings his foundation of discipline into his research. I’ve had the pleasure of collaborating with Randy on business value for the past 20 years. His latest research on the need for business value illuminate the value gap like never before – the divide between sellers who pitch products and jump to demos, and buyers who want solution providers to focus instead on the buyer’s challenges and business outcomes from proposed solutions.
According to Perry, “Over 95 percent of B2B buyers now require financial justification on any significant purchase, now set at $50,000 or more.” Research shows that accountability is extreme, budgets are tight, and risk avoidance reigns. This gives solution providers a new opportunity.
According to Perry, two-thirds of buyers don’t have the time, knowledge, or tools needed to make business value assessments and calculations. If you leave financial justification to the buyer, you will face delays when getting proposals approved. But if you address these gaps, you will stand out from your competition and accelerate sales.
In fact, according to IDC, 81 percent of buyers expect vendors to quantify the value of proposed solutions and provide a formal business case proposal41. According to Perry, “Your prospects clearly need the help, and the solution provider who delivers a business value analysis first can gain a significant advantage.”
Unfortunately, only one in five buyers will ask for a business case. Since most sellers provide only what is asked for, the majority of prospects will struggle to produce financial justification on their own. This can add weeks, if not months of delay to the purchase process. Without required justification, the project may delay behind other priority proposals, and approval may never happen at all.
But Perry has good news: “Those vendors that step up and provide business cases proactively on all significant proposals will win more deals, more quickly.
If you like this interview, there are dozens more from the best value selling and sales enablement thought leaders in Evolved Selling: Optimizing Sales Enablement in the Age of Frugalnomics
IDC, Business Value Summit Keynote – IDC + Alinean – Why Financial Justification / ROI is so Important to Marketing & Selling Success, March 6, 2017