April Dunford (0:01)

Welcome to the Positioning show where we discuss topics related to the practical application of positioning for marketing, sales and product teams. I'm April Dunford, a consultant, author, and the world's leading expert on positioning for B2B technology companies. Hey everybody, welcome to another edition of the Positioning show with me, April Dunford. I got a topic I want to cover this week. It's a thing that comes up with a lot of clients when I work with them on their positioning and it has to do with the difference between value and objection handling. So let's recap a little bit on what value means and then we'll talk about what objection handling means. So in my positioning process, when we're going to position something, we start with competitive alternatives. So competitive alternatives, that's the answer to the question, what would a customer do if you didn't exist? So there are two types of competitive alternatives. There's the status quo or whatever the customer is using today. So that could be an Excel spreadsheet, it could be, I'm going to do it manually with people. It could be an old legacy thing that they've had for a long time, or it could be a product that just didn't work out for them for some reason. So there's, first of all, that's the status quo, that's the thing you're replacing. And then the second thing you need to beat in order to win a deal is you need to beat anything that ends up on a short list against you. Normally when we think about competitive alternatives, they fall into those two buckets, status quo, short list competitors. So we look at that and then we look at, well, what makes us different? So what are the things that we have that the alternatives don't have? And usually when I do this with a cross functional team, we'll fill up whiteboards full of stuff that we can do that the competitors can't do. And some of that is features like, so some of it will be, ah, we've got this neat AI thing and the other guys don't have it. Or we have, you know, a particular feature or a capability that the other folks don't have. We start with capabilities so that we can handle value later. Now when we're going down that list of capabilities, not everything is a feature of the product. Some of those things are capabilities of the company. So maybe you do pricing in a different way than the competitor does. Maybe you have a professional services team and the competitor doesn't do that. Maybe you adhere to a particular standard like SoC2 or HiPAA or one of these standards that are there and the other guys aren't necessarily adhering to that standard, or they don't necessarily, you know, they haven't passed that standard. It could be a big range of things. So we have capabilities of the product as well as capabilities of the companies. We have this big, long list of things. Now, we'll usually start this exercise by going down the list of features and translating it to value. And how we do that is we ask the question, so what? So we'll start with the big crunchy things that we know are really differentiating. So we'll say, okay, we have this key feature in our product that no one has. So what? Why does a customer care? What is the value that that feature enables for a customer's business? And then we'll go down the list and we'll see if there are value themes that pop out. Because we may have a long list of differentiated capabilities, but we don't necessarily want to end up with a really, really long list of value points because a customer is not going to be able to remember all that stuff. So what we really want is we want to get to 1, 2, maybe 3 value themes or value buckets. So we'll start with the big, big capabilities. We'll translate that to value. And then often what we see is a lot of the smaller differentiated capabilities just map to one of the buckets that we've already est. Now, when we do this exercise, sometimes we'll have some things that don't neatly fit into a bucket, but they're important. And they're important for a lot of reasons. They're important because customers bring them up in sales calls. They're important in that we wouldn't be able to win a deal without them. But they're not necessarily mapping to our real value theme. So let me give you some examples of that. So it would be things like almost every company I've worked with, they'll say, we, we do a great job on support. We've got fantastic support. When we survey our customers, they're really happy with support. It gets really great rating. We, you know, we've got support. Our support is way better than everyone else. Now, obviously, customer support is really important. It's particularly really important once the customer has bought from you. And I would say it's one of the main things that gets you a renewal. And we'll talk about that in a second. But it may not be what I would call pure value for a customer that is looking to buy you. So here's what I mean, by that, ask yourself this question, would the customer care about this if they hadn't already decided to buy you for other reasons? So all things being equal, if the only thing you had was great customer support, would they buy you? Not necessarily. The other thing is that with something like customer support, it's a little bit hard to measure. It's a little bit hard to definitively say our support is better than the other guys. Now you may have something that does make your support better than the other guys. Like Maybe you have 247 support and the other folks don't. Then I would say maybe the value there, the value theme might be we could support a company that's international better than anybody else. But we really need to look at is this thing value on its own? Another thing that comes out on this is some companies will have spent a lot of time making it really easy for a customer to adopt their software. So let's say we have some kind of enterprise software. It's not, you know, a super easy thing to deploy. So we have a professional services team that's going to help you do that deployment. We may have invested in some money in doing a bunch of pre built integrations so that you don't have to code from scratch the integration to all the stuff that the company has across the enterprise. And then we might do some things like maybe we've got some special training so that users can get onboarded really quickly. These are often what I would say fall into a bucket of objection handling rather than pure value. So the reason we invested all that money into that is the objection is hey, that thing you got, it sounds really good, but it sounds kind of hard to deploy. And then you handle that objection by saying, don't worry, we got a professional services team, we have training, we have pre built integrations, that's why we do that. So would I, if, if it's purely handling an objection, meaning a customer says, hey, I what you do, but you don't adhere to this standard so I can't buy you. Oh, I like what you do, but it looks like it might be really hard. I like what you do, but we really can't afford it and we don't like that pricing model. I like what you do, but I, I wish you did a better job of, you know, how are you going to actually support all my people in all different time zones in different languages. These things in my mind are not actually value. It's not the reason that the customer buys you. But that doesn't mean they aren't important. Of course they're important. They're super important. It's important because, you know, in some cases customer can't buy you without that. In other cases it might actually be differentiated, meaning you're the only one that does it and no one else does it. But that differentiation on its own is not enough to convince a customer to buy you like the fact that you have pre built integrations with everything else. Well, who cares if I don't already want to have your product? These are the kind of things I don't worry about unless I've already decided, oh, hey, it'd be great to have this thing. But sounds like a lot of work. Things that are specifically objection handling in my mind live in a different way in your marketing and sales. Let's use an example of you've got CRM software and you're selling this to the head of sales. Now your real big differentiated value might be that you have a set of capabilities that allow your product to do this really great job of predicting what the actual closed revenue is going to be in a quarter. So you do this really great predictive stuff. And so the value for a head of sales is, you know, you'll know exactly when you're doing reporting up to your management, you'll know exactly where the revenue is going to come in in the quarter and you'll be able to do that much more accurately that you could with any other CRM. So let's say that's the value, that's the main, oh, I've got a, a buyer in the sales department. They're really excited about that. That's great. You know, because they got in trouble a couple quarters ago because they thought this was, it was going to close this way and it closed a different way. And then, you know, the head of sales looks dumb because they didn't predict that accurately. Now I'm going to have this software and it does that. So but I've also got, you know, all this objection handling stuff which is, you know, for sales team that head of sales might worry maybe this is going to be really hard to get my salespeople to actually use this thing. And if they don't use it, then I don't get the benefit of having this better prediction. Everybody's got to use it. So the objection is, you know, this is going to be hard for my sales team to use. And so maybe you have a bunch of cool stuff like you have special training that's been developed for that. You've got special things inside the Product to make it really easy for folks to learn. Maybe you've done some things, some specific training to get folks off the big incumbent that they're probably using and make it easier for them to make the switch over to this thing. And you've got some specific things around that. So if I think about where does this stuff live in my marketing and sales, if I think about the homepage, is the homepage going to say, hey, we've got all this special training to make it really easy for your guys to get on this thing? Well, not necessarily. In fact, it kind of makes you sound like it begs the question, like, is this stuff really hard, hard to use? Why do you have that? The thing about objection handling is you don't tend to bring it up unless the objection has been raised. But you absolutely would have your core value front and center on the website, which is, we're going to give you this way, more accurate revenue predictability in the quarter. Now, somewhere deeper in the website, when you're getting at all the gory features that you have, you might mention, oh, by the way, we've got this stuff because the customer may have that objection as they're reading through the thing, but we're not going to lead with with that because it's not value. Is objection handling the same way if we look at our sales pitch, in the sales pitch, we're trying to orient the whole sales pitch around our differentiated value. What's the value that we could deliver that no one else can? So we're not going to orient the whole sales pitch around. Hey, we've spent a lot of time making it really easy for end users to adopt this thing. We're going to make that whole sales pitch orient around this differentiated value. We've got like, hey, we're going to give you better visibility into the pipeline, more accurate pipeline prediction. But then there'll be this objection handling step. If you look at my sales pitch structure, we focus on value. The bulk of the time we have is focused on value. But there is a step to handle unspoken objections, which is right near the end of the pitch. That's where something like this would live. You don't want the customer to leave without, without handling that objection because potentially they might leave and say, wow, you know, I really loved what they did and I looked at it, but man, we're never going to get our people to be able to use. If they say it in the sales pitch, you want to handle it then. But if nobody says it in the sales pitch and you've Got a really good response to it. It doesn't hurt you to include it in an unspoken objection handling section, which is typically near the end of the sales pitch where you would say, hey, and just in case you're worried about this, because some folks are. Some folks are worried that their sales team isn't going to adopt this. But don't worry, we got you. Here's all the things we've done specifically to make sure that your sales reps are going to adopt it and it's going to be great. Now, there's an important aspect to think about when we're thinking about value versus objection handling, and that's related to the Persona that we're thinking about in the deal. So let's think about this. In a B2B purchase process, when we're selling particularly enterprise software to a customer, we typically aren't just selling to one person. There's like a deal team of sorts. And so we will have different Personas in the deal. So let's say I'm selling something to a line of business, like I'm selling something to the sales team. And my. I may have a champion in that deal that is the head of sales or the head of sales operations. And that person is responsible for making a short list and figuring out what we should look at and ultimately, ultimately making a recommendation to the economic buyer who might be the vice president of sales or it might even be an executive above that. But the champion is going to make a recommendation to the. To the economic buyer of what we're actually going to buy. Now there's all these other people involved though. Like, they can't just make a decision without making sure that it is okay with it. And they'll have to make sure the end users are actually going to use it and like it. And purchasing might get involved and legal might get involved. The stats on this are terrifying that a typical B2B purchase team is like five to nine people. So it's. Some people like to think of it as this giant committee of people, but my experience is it's not really a committee. Like, it's not like a group that sat down and they have a regular meeting and they're doing stuff together. In my experience, there's a champion, and that champion's job is to run around and make sure that everybody else is okay and then make the recommendation to the economic buyer if they're not the economic buyer themselves. So if I think about it that way, the only Persona that can get a deal done is the champion. Like, if Your positioning doesn't resonate for the champion. You don't even get on the short list. You don't even get to worry about everybody else. And then everybody else is kind of like the department of no. Like the champion is saying, hey, we want to do this thing. But then they got to take it to legal. And legal say, not unless they have this, that, and the other thing, or you take it to it. And they go, it's got to be this and it's got to be that, and it's got to be really easy to manage, and it's got to integrate with the things that we already have. Or you take it to the end users, and the end users say, no, no, we're not going to use this thing. We don't like it. No, we don't like it. None of these other Personas are going to make a deal happen, but they can kill the deal. So that makes them really important. Now let's go back to value versus objection handling. When we're thinking about that, the value has to really, really resonate for the champion. If it doesn't resonate for the champion, we don't get on a short list. We don't get anywhere near this deal. So the champion cares a lot about value. The economic buyer probably cares a lot about value as well. The rest of these people, they're just people with objections. So the way we handle this in our marketing and sales and in our positioning specifically is we're keeping our differentiated value for the champion and the economic buyer. We're keeping that at the center. And then it's our job to arm the champion to handle the potential objections of everybody else. So it might say, well, you know, this is no good unless it. Unless it's sock to compliant. And so we tell the champion, hey, look, your IT people are going to be worried about whether or not this thing is SOC to compliant. Don't worry, we got you right. Or we might say, hey, legal, they're going to worry about this stuff. So here's what you say. When legal says that. Or sometimes we actually try to get ourselves invited to that meeting where we say, hey, you know, we're going to. You're going to have a bunch of questions from it. They're going to be hard to handle. We'd be happy to come in and do that meeting with it so we can help handle those objections. I've worked at companies where we've actually built specific content that's aimed at these other folks in the buying committee. But that content is really not focused on value. It's really focused on the objections from the perspective of that person in the deal committee. So again, when we think about value versus objection handling, you can think about, well, what's the value for the economic buyer? What's the value for the champion? And then we can look at all of the other Personas in the deal team and say, what are their potential objections? And are there things that are on our list of differentiated capabilities that are literally capabilities that nobody cares about except this one particular person on the deal team? And they care about it because they have a potential objection? Well, then that's objection handling. That's not value. The thing to really keep in mind here is differentiated value is what gets you the deal. But this other stuff that ends up look like objection handling, these are ways that you lose the deal or reasons that the company may disqualify you from getting a deal. Now, whenever I have this discussion with companies, it's like everything else on the planet, There are exceptions to this rule. So I would say, in general, these things don't end up being our core value, but sometimes they do. And so I want to talk about that, too. This is the hard thing about a lot of things when it comes to positioning, the devil's in the details of this stuff. And whenever you say, oh, there's a rule, and it's always like this, there's always an exception. Anybody smart will tell you there's always an exception. So this is like that. There's an exception. Sometimes what you've got is a big incumbent vendor that is in the space, and that vendor has done a particularly terrible job on something. And for some reason, everybody in the space, like the customers, have decided they've had it with this particular thing and they're going to switch off and find a new vendor. Now, it's usually not just one thing. Sometimes it's a combination of things. But I've seen this a couple of times. So here's one example. Once I was in a space and we were selling ERP to midsize manufacturing companies, and there was a slice of the market that had been using an incumbent vendor. But they had been around since, you know, the year of the flood, these guys. And they had stopped investing in the platform, they had stopped investing in customer support. And so what they had was this platform that was getting buggier by the minute. It had all kinds of problems. And then if you were a customer and you called to get some support on that problem, good luck, you know, nobody would call you back for Two days. Customers were getting extremely frustrated with this. And it finally got to the point where a good proportion of these customers were like, that's it, we're not, we're not sticking on this thing anymore. We're looking for something else. Now because they had such a bad experience with bugginess and lousy customer support, this particular set of customers were looking for a company that could do everything that the other thing did, but their main thing was support. Like, we really want this rock solid support. So in that case, we did have a specific value bucket that we did put right in the middle of the homepage and right in the center of the sales pitch. We bragged about how amazing our customer support was. Was. Now we had a bunch of very specific things. We weren't just saying, hey, the support's good, trust us, man. Because people had been burned so badly by that, they wanted to know the specifics. So one of the things we did was we had a dedicated support person for each customer account. So you didn't just get, you know, a support email or support phone number to call, you had an actual person that was your dedicated person. And then we had a service level agreement and support that we guaranteed that you were going to get, get a response to your support request within two hours. So there were very specific metrics put around on this thing to handle this thing with support. And then we had some outside testing agency look at our code quality and produce a report to talk about how few bugs we had this code. And the code was super high quality according to some third party standards body that looked at that. And then we had invested some, some time and looking at customer satisfaction and we could talk about customer satisfaction. And then we had super happy customers, and not just super happy customers saying they were happy about everything, which they were. But we had super happy customers saying, you know what's so great about these guys? It's that rock solid code and that amazing support so that we were running right at the thing that this customer had looked at. So there are exceptions to this and usually it's because there is a competitor and generally the incumbent or the number one in the market has done a particularly bad job at a specific thing. And so that's leaving themselves open to, you know, a competitor to come in, focus on the part of the market where that thing is really important and the, and the incumbent is falling down on that, then we can come in and we can actually use that as value instead of objection. Handling this stuff is hard, men. Like if it was easy, you wouldn't be sitting here listening to my podcast or watching me on YouTube. You'd be on a beach drinking out of a coconut because you'd have this all figured out. But this stuff isn't easy. And so whenever you're doing this kind of work, you need to lean back a little bit and think about this. I think this issue of what's actually value versus what is there, and it's important and we want to talk about it, but what we're really doing is just handling objection. I think it's a really important thing to think about if you're working with a group of people and you're working through this stuff. So you may get to the point where you've got to really sit down and sort through what's value, what's objection, handling, and make the decision on the two things. Anyways, that's it for this week. Thanks for joining me, as always. A couple of things. The podcast was on a little bit of a hiatus for a while, but now we're back in action, so you can expect one of these every couple of weeks. I've got some interesting guests coming up, too, that I'm really excited about, but you'll see those when they come. And hey, if you like this podcast, I would love it if you, you know, give it a rating or give it a review. This is how people actually find out whether or not a podcast is good. So I would appreciate that. Anyways, until next time. Thanks so much for joining me. Bye.