Predicting a Solution’s Value

Predicting valuePredictive lead scoring can identify the leads that will place the greatest value on your solution – and pay the highest price.

Value, the difference between the benefit that a customer receives and the total cost to achieve that benefit, is central to solution marketing.  But value is also closely tied to lead scoring as well, with major implications for your company’s revenue and profitability.  As I recently wrote in SearchCRM,

A lead score predicts the likelihood that a given lead will ultimately convert into a closed deal. The higher the score, the more likely that a lead will turn into a sale. The score may incorporate predictors such as the lead’s current challenges and technologies, the presence of an active and budgeted project, selected demographic/firmographic data, and even frequency of activity.

Companies use lead scoring to determine which leads should be sent from marketing to sales, and/or to prioritize the best leads for sales follow up. Lead prioritization is especially important today since content marketing can swell the new leads at the top of the funnel, which must be prioritized so sales reps can make the best use of their time.

Predicting a 20% increase in average selling price (ASP)

Not only does a high lead score predict that the prospect will purchase a product.  A high score also can predict that the customer will actually pay more for a product.  As I was writing another article on predictive lead scoring for SearchCRM, Brian Kardon, CMO of Lattice Engines, shared an unexpected finding from Lattice’s research. They found that companies using predictive lead scoring saw average deal size increase by about 20%.  Kardon believes that this could be driven by high lead score customers being more “desperate” to purchase the solution (i.e., they believe that they will achieve a greater benefit and therefore they have greater urgency than others), and therefore less price-sensitive.  Conversely, low lead score prospects are less likely to be interested, increasing the likelihood that they will push back on price and request a discount. Since predictive lead scoring helps the company to identify and focus on the most likely high spenders, the company’s prospect mix will tilt toward those prospects, which in turn leads to a higher average deal size.

Value is equal to the difference between perceived benefit and total costWhat drives need for a solution?

So the more the prospect needs the solution, the more they should be willing to pay for it. So what drives need? Especially for enterprise solutions, a B2B buyer’s needs are driven heavily by the desire to resolve an important business problem. How important that problem is, and the degree to which your solution can solve that problem, will depend on the prospect’s characteristics (many of which are identified via lead scoring) and the use case (how they will use the solution), among other factors. So the more you know about the prospect and the use case, the more effectively you can prioritize good leads vs. bad leads and tailor your solution and pricing accordingly.

Predictive lead scoring engines analyze thousands of characteristics. But here are a few basic characteristics that may affect need:

  • Business problem being solved (e.g., declining revenue, rising expenses, compliance)
  • Operational problem being solved (e.g., lengthening cycle times, deceasing throughput, poor customer service, weak security)
  • Use case (g., archiving documents, plant CAD/CAM drawings etc)
  • Industry market segment (e.g., manufacturing, telecom, financial services etc).
  • Business function or department (e.g., accounting, production, engineering, marketing, customer service, sales) of the user and/or buyer
  • Geography
  • Buyer title and seniority
  • Company firmographics such as revenue, number of employees, company age, whether company is public/privately held, in the public sector, is an NGO

The more you know about the prospect and their challenges, the better able you are to provide the right solution that delivers the right value to the customer.

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How Apple Creates a Future that Sells

AplWatch-HomeScreen-PR-PRINT_2Today Apple announced additional details of AppleWatch as well as a new, slimmer (!) MacBook line at a media event in San Francisco.  Apple is an iconic company and their innovation can provide helpful lessons, many of which apply to solution marketers. Which takes me to the AppleWatch: Needing to be tethered to a iPhone via WiFi, and carrying a not-insignificant price for an optional gizmo, it’s not clear how well this new product will perform I the market.  But if anyone can make a go of it, Apple can.  Here’s why. Continue reading

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Cyber Lessons from Black Friday

Black Friday offers an important lesson for cyber (i.e., enterprise software) solution marketers. 

Bombarded by Black Friday

Cyber lessons from Black FridayOver the last few weeks, we’ve been bombarded with a never-ending stream of Black Friday TV commercials. These included a litany of TV commercials for BMWs and other cars on sale for Black Friday. Maybe it’s all due to a surge in self-gifting, although experts were predicting a drop for 2014.

In a world where everything from clothes to cars was on sale on or around Black Friday, retailers were competing against just about every other retailer for the $381 that the typical shopper spent this past weekend, according to the National Retail Federation.  That included direct competitors offering similar goods, indirect competitors who offered different goods that solved the same problem (say, giving a nice gift) and what I’ll call Share of Budget competitors who solved different problems but competed for the same budget.

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Solution Marketing @ The Boston Startup School

By Steve Robins

Solution Marketing for Startups

A few weeks back, I had the opportunity to teach a one-day solution marketing class at the Boston Startup School, located in the Harvard Innovation Lab.

Learn to Do

If you have the opportunity to teach, learn, network or otherwise participate with Boston Startup School, jump on it!  Run by startup incubator TechStars, the new program helps “young professionals to learn the skills needed to have an immediate and positive impact on the startup they join.”  Wondering what’s on their minds?  Check out the new blog by the sales and marketing classes, www.GrowthNinja.com, which states that…

 You don’t have to start a company to be an entrepreneur.  Entrepreneurship is a mindset.  It’s a healthy discontent with the status quo that brings together teams dedicated to making the world a better place.  Entrepreneurs include all members of a startup team, from the CEO to the summer intern.

…and I couldn’t agree more. Continue reading

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Keynote at ProductCamp Boston: The Invisible Customer

By Steve Robins

Join me On June 9 at Microsoft Cambridge for ProductCamp Boston 2012!

ProductCamp BostonI’ve always been passionate about ProductCamp – I’ve been speaking at ProductCamp Boston since it began in 2009 and have been leading the marketing team since 2011.  So I’m very honored to be delivering the keynote presentation this year.

The theme for ProductCamp Boston 2012 is Customers First!  And it’s a fitting theme since customers are so central to the success of our products and solutions, companies, and even our careers.

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Where’s the Customer at Sony?

It’s time to think outside the box.  Or the division.  Or the hardware.  Or the…

Sony - SolutionMarketingBlog.comIn order to offer complete solutions, companies need to come together around a shared vision of the customer, their challenges, and ways that the company can help.  Companies like Sony and AOL Time Warner have been hindered by competing divisions often focused on divisional goals at the expense of the company.  By contrast, Apple unified around a common vision of the customer, and a view of a complete solution spanning hardware, software and content.

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Oscar’s Inconvenient Truths

By Steve Robins

Watching Sunday’s Oscar awards, I was struck by… the importance – “and inconvenience” –  of customer feedback in multiple forms:

  • Inconvenient focus groups – The mock focus group screening (gasp!) the Wizard of Oz.  Very funny but it points to the frustration that artists often feel around Hollywood focus groups that disagree with their artistic vision.  And they’re not alone either.  It may be inconvenient but those customers do hold the purse strings, so they’re kind of unavoidable after all.
  • Inconvenient innovations – Billy Crystal’s jabs at bankrupt Kodak, whose name (at least for now) graces the Oscar theater.  Hooked on film until it was too late, Kodak missed the inconvenient truth that film was less important than capturing and sharing images in the easiest manner possible.  The very company that invented digital photography found that truth inconvenient and now faces a very different and more painful inconvenience – bankruptcy.
  • Inconvenient movie-consumption – The Oscar ceremony focused again and again on the movie theater experience with many references back to the good old days.  Those good old days will indeed live on – but only in people’s memories.  Although more people attend movie theaters than theme parks (duh), theater admissions are declining as people consume movies at home on TV, DVDs and iPads.  Instead of reminiscing about the good old days, the industry would be better served to focus on the bright future of entertainment everywhere – on mobile, tablets, at home etc.

Customer feedback may seem inconvenient.  But not listening to customer feedback delivers the ultimate inconvenience.

 

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