The myth of buying on benefits
- Have buying priorities changed? Salesforce.com thinks so. They talk about outcomes rather than features and benefits. It sounds like a powerful argument but does it hold up?
I noticed a story from Salesforce.com, one of our premium partners entitled: The Sales Hunter On The Myth That Customers Buy on Benefits. It's an interesting assessment of what gets people to make a buy decision. the author contends that:
Great selling is not about features or benefits. It's about outcomes. If you're having to explain the value of what you offer to your prospect, you can do so by talking to them about the outcomes that your product or service provides.
Since this is a Salesforce.com site you can be sure there will be a hook in there somewhere to what they have to sell:
Before buying CRM software, we might picture a glorious meeting with the CEO of the company where we marvel over the sales numbers.
Nicely done. But to the meat of the argument.
The last year, I've been going back and forth with various analysts, consultants and customers on the topic of what is selling and why - more to the point - what are buyers trying to achieve with their investments?
This discussion kicked off last November when I was talking with Ray Wang, CEO Constellation Research about the diginomica business model and what we are trying to achieve. At the time I remember saying: 'The days of feature/function comparison are over, people I meet want solutions to problems." Ray, being the good mentor he is said: "I'd say you might want to think a bit differently. People are buying outcomes."
Since that time, he has consistently talked about business outcomes across multiple dimensions. Check this post on the evolution of social business at MIT Sloan Management Review:
At the beginning you’re starting to talk about how social fits inside the organization and are doing experimentation. You know you’re successful when you’ve identified an outcome and measured results. As Stephen Covey says in his classic, Seven Habits of Highly Effective People begin with the end in mind. And if you don’t have that during experimentation, you’re really not going to get too far.
Pretty straightforward and in this case, something that emerges quickly as a factor in shaping future investments. Right? consider these two points.
In the SME market, I remember when the early cloud accounting players emerged, incumbents were dismissive. They said the new boys and girls on the block could never win because they could not compete on features. The cloud players fought back by concentrating on what customers needed, not what the incumbents think that buyers need. It turned out to be the right strategy.
In times past, incumbents dismissed Salesforce.com as providing little more than a sub-par feature rather than core functionality. That turned out to be a mistake as evidenced by the partnership announced last week between Oracle and Salesforce.com. Why? Salesforce.com offers a fast onramp to CRM that sales people want to use because it helps them achieve their goals. In other words, it meets their outcome needs.
So have 'features' truly disappeared off the buyer requirements list? Yes and no and it depends on the business with which you're having that conversation. Buried in some of the detail of the Oxford Economics survey is an interesting nugget that talks to the way companies are investing:
Business management software is shorthand for ERP and supply chain. You can be sure that those software will be the subject of deep functional scrutiny but does that blow up the 'outcomes' argument? I'd say no. These technologies form the backbone for everything else so need to run flawlessly.
Smaller companies are emphasizing investment in business analytics (52%) and business management software (58%)—catching up on these established enterprise tools—while their larger peers are more focused on mobile (41%), social media (44%), and the cloud (40%).
What's different today is that the pressure to deliver at lowest cost is much greater than it was in years past. It's not just about being the best, it's also about being the most cost efficient so that funds can be allocated for investing in projects that are more obviously outcome focused like 'growing revenue 10 percent next year.'
However you view technology acquisition, the winds of change are blowing. Wang is right. Buyers priorities are changing and the manner in which decisions are made is also changing. Features and benefits may not have been wholly backwatered but outcomes rule.
As a aside note, if you look over to the right hand side of diginomica's front page and post pages, you'll see we have something called 'premium partners' and immediately below that 'partners.' These are feeds from our partners and point to stories that might be of interest to readers. They're conversational starters.
PS now where is that list of outcomes that partners get from us? :-)
Image credit - Oxford Economics
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