B2B Software vendors
Many software solutions will prevail if customer-centric, market-driven thinking permeates the company’s product development planning and execution, and go-to-market strategy. Understanding customer buying criteria is essential in: solution markets crowded with many vendors, highly commoditized software markets, and/or markets for complex software solutions. Determining and using customer buying criteria will help teams in the company understand where each solution stands relative to the competitive landscape and the appeal of each solution as the right solution from the customer POV.
A tool configured as a Customer Buying Criteria (CBC) matrix can very helpful to sales teams to work effectively with customers-as-buyers. The CBC matrix can bring a lot of clarity to mapping a software solution to the wants and needs of a particular customer. This is a tool that relies not only on extensive customer and competitive intelligence, but on the cumulative wisdom and experience of multiple teams in the software company.
Cross-team Collaboration to Build the Best Sales Tools
Market and competitive intelligence for software companies is at its best when the results of analysis are used in applications that help and support many internal teams: sales, products teams, marketing, management. As a corollary, a lot of the best tools for sales teams require cross-team collaboration. This sort of collaborative effort is essential to create tools that are smart and thorough in every way possible. Contributing teams include:
· MI/CI for competitive landscape, market analysis, target customer analysis
· Product marketing / management for evaluations of software vendors own solution and understanding of customers, markets and competitors
· Sales, professional services, partners – feedback from customer engagements
· Reviews of the resulting tool by all for determining realistic values for ratings and relevancy of criteria and capabilities
Tools developed by cross-team efforts frequently reciprocate “paid back” value to collaboration participants by providing a new “benchmark” to use for strategic and tactical self-review and analysis for improvement. Most software companies are short on people and time, even when the economy is good. As such, it is important to choose projects that yield both strategic and tactical benefits to many teams, and that have the depth to generate spin-off projects and tools.
Conceptual Overview of Customer Buying Criteria Sales Tool
The Customer Buying Criteria tool greatly enhances sales efforts by tapping into the understanding of what customers want. The CBC tool dovetails well with consultative selling where the sales team (and the software company) becomes a “trusted advisor” helping the customer-as-buyer successfully solve business problems. With the CBC tool, sales teams have real talking points for the buying criteria that matter to customers, to be able to speak the same language. Instead of communicating with a customer by blathering on about product features/functions or “7 reasons to buy my product”, much more meaningful exchanges take place where the customer is driving the conversation based on what she/he wants to buy.
If a software vendor does not know what its customers want, the vendor will not be able to convince customers to buy its offerings. It’s not about “my product is better than competitor X” – it’s about “my product will give you what you need to be successful with your needs”. Most mid-market and enterprise software solution markets are more and more driven by expectations that are pre-defined by customers.
A clearly defined context for the software solution is essential for a customer buying criteria tool to be effective. The tool will comprise a single solution that the company is offering, that it does well and for which there is a strong market. Context also means that using the CBC tool well is highly dependent on fully understanding customer requirements for each individual sales opportunity (no one-size-fits-all).
Setting context is everything:
· One single clearly defined solution per tool
· Identifies target market
· Why the customer should care
· Attributes that matter to the customer
· Spell out the product solution’s particular positioning in the larger solution market (ex.: web experience management for large global enterprise websites – external-facing sites – customer-engaging – within the high end WCM market)
How does a software vendor determine the customer buying criteria for a particular solution? It’s all about what target customers want from the solution – in their words, from their POV. The key customer buying criteria (categories and capabilities) are developed based on industry expertise and customer engagements, and are not “traditional” feature comparisons. Sources for determining criteria include:
· Customer interviews and surveys
· Customer segmented market research
· Sales and partner feedback
· Industry writers and analysts
· Information from companies you would like to have as customers, potentially gained through partners (resellers, SIs, solution providers, etc.)
· Market and competitive intelligence analysis – particularly to validate future market directions and competitive landscape intentions
Practical Overview of Customer Buying Criteria Tool
The overall CBC tool comprises a superset of all relevant customer buying criteria in order of importance, based on what was determined through the research and analysis process. Under each criterion are multiple solution capabilities that customers understand and need for meeting project requirement. These capabilities are not feature/function lists from the product POV, but higher level and expressed in customer terms.
Before the sales team uses the CBC tool for sales engagements, an excellent and thorough discovery with each customer must be conducted to understand the specific criteria that come into play (what matters, what doesn’t). If the sales team doesn’t understand what each customer-as-buyer needs, then the tool is of little use.
The CBC tool can never be left with customers. First of all, a lot of the software company’s competitive information exists in the tool. Second, leaving this sort of tool does not adhere to consultative interaction and does not help the conversation with the customer. (More on these points: Software companies still fail to tap into top benefits from market and competitive intelligence programs)
Recommendations for building a CBC Tool
· Consider using Excel to take advantage of customizable viewing options
· Entries for key customer buying criteria
o Several high level criteria categories - each with multiple capabilities
o Criteria in order of customer priority
o Criteria mapped to sales cycle phases
· Criteria aligned to primary & secondary target customer roles for discussing each buying criteria category
o Many B2B customers-as-buyers are composites of multiple roles
o Different phases of “sales cycle” will map to one or more roles, such as BU, IT
· For ease of viewing / using:
o Collapsible / Expandable groups of rows customize view
o Can hide unneeded competitor columns
o URL links in cells, to navigate to supporting content in company’s internal archives
· Competitors: from left to right = most important to least important
· Can include more than one relevant current release of your company’s particular solution
· Competitor versions should be most current – provide release #s
· Ratings are assigned based on an assessment of the support for each capability provided by each vendor (your software company and competitors)
o Ratings will have a qualitative nature and could be:
§ Green – above average (better, best)
§ Yellow – average (adequate, so-so)
§ Red – below average (not good, missing)
· Data for deciding ratings for your solution come from all products teams, and participating sales and professional services
· Data for deciding each competitor rating comes primarily from third-party sources (links in cells) – preferably multiple third-party sources, and will reflect input from all other teams through review processes
There is definitely a qualitative aspect to the ratings in the CBC tool, but it is mitigated by the extensive research and analysis done for understanding and evaluating the competitive landscape. Further reviews by company teams and partners will bring the “wisdom of the crowd” (and the “wisdom of the gut”) to evaluating the overall accuracy of the ratings and of the resulting “big picture”. The company’s own ratings should follow an approach where the contributing teams are the harshest critics for how well the company’s solution delivers on capabilities for the customer buying criteria.
Fine-tuning on a continuous basis must happen to keep the tool fresh and responsive to customer and market changes, as well as new product/solution releases. Maintenance of the tool will cover changes and corrections contributed by the company’s teams, feedback from customers and partners, and industry evolution. The tool is structured to enable ease of updating and publishing new versions quickly.
Setting up the Customer Buying Criteria tool as a superset of all relevant criteria makes it possible to generate subsets as smaller, focused versions. These permutations can be provided for niche/industry focus, particular customer subsets or solution scenarios, or views of particular competitors, whether for selling or for internal purposes.
Sample CBC Tool
Benefits of using Customer Buying Criteria Tools
Successful outcomes to engaging customers-as-buyers require all teams collaborating in many different ways – constructing a well-made CBC tool provides the collective expertise of multiple teams. For sales teams, the tool is a source of many permutations of talking points. New hires for sales will find this tool especially helpful to ramp up more quickly. The CBC tool aligns sales cycle strategy with the software offering, relative to individual customer requirements, needs, and desires. For each sales opportunity, the sales team can scan across the matrix of the company’s offering compared to competitors to get a quick sense of where strengths, weaknesses – and serious trouble – come into play in the context of each customer’s requirements. In a sense, the tool provides a huge and very useful Reality Check for every sales opportunity, even to the point of using the tool as part of the qualifying process: is this opportunity really worth pursuing, is the deck stacked against us, what gaps will have to be filled to work well for the customer?
Customer benefits from the CBC tool are indirect (since the tool is not shared with customer) but still important:
· Better basis for sales to talk with customer – conversation moves along more realistically while engaging customer with true customer needs and concerns, and in language of the customer
· Customer can decide earlier in sales cycle if solution really is a fit – from the start, the conversation has been from customer POV and relevant to customer needs, requirements and desires
· Better identify what criteria really matter for project, and which criteria are optional
· Customer can see that the software company thoroughly understands the solution space from the customer POV
For the products teams, including product marketing, the CBC tool can be a reality check on how well the company provides relevant customer-centric, market-driven solutions. Looking at capabilities / rankings of the company compared to competitors:
· Allows the teams to step outside the “day to day” and really look strategically at the offering and how it stacks up in the competitive landscape
· Evaluates how the company is / isn’t meeting customer expectations and requirements
· Provides close scrutiny of differentiation and whether the company is stuck in too much “me too” development
· Taps the tool as a metric for the software solution and for its competitiveness
· May lead to new thinking for creating new solutions, better differentiation, more creative approach to solving customer problems, increased competitiveness, and better quality for the solution
Upper management now has a tool to help see and better understand the big picture, especially for complex software solutions selling into crowded markets. Hopefully, the CBC tool will enable better dialogues between the executive and the products teams, working from common basis.
About the author: Julie Hunt is an accomplished market intelligence analyst, providing strategic market and competitive insights for the software industry. Her 20+ years as a software professional range from the very technical side to customer-centric work in solutions consulting, sales and marketing. Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Market & Competitive Intelligence Services
Comments