Every single thing that happens in sales is about learning — on both parties’ parts — and this includes presenting and discussing value metrics with prospects and with customers who are up for renewal. What works best? Adopting an attitude of rampant optimism or one of friendly skepticism? Should the value metrics you present be the same, or should they vary when you’re talking with inbound prospects versus outbound prospects? Is it most effective to emphasize only one appealing value, or is it better to trot out several beneficial metrics?
In this third Market Dominance Guys’ conversation between Chris, Corey, and Mike Genstil, co-founder and CEO of VisualizeROI, this trio of experts discusses how to price your company’s offering, how to handle discount requests, and what to do about a prospect’s fixed-budget limitations. Most importantly, they delve into the reality of what happens when you have successfully convinced a prospect of the value of your offering — to the extent that he is now a champion of your product or service — but when he carries your banner back to his company, he is faced with a bunch of skeptics who haven’t had the benefit of hearing your pitch. Since 98.3% of all sales decisions are fought internally, you’ll want to hear the strategy Chris, Corey, and Mike suggest for arming your prospect with the value metrics that will help him win that battle.
About Our Guest
Mike Genstil is co-founder and CEO of VisualizeROI, an innovative company that enables B2B sales and marketing professionals to easily create and share visually compelling value propositions with prospects and clients.
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The complete transcript of this episode is below:
Chris Beall (02:19):
Every single thing that happens in sales, up to the point where somebody signs a contract, is learning on the part of both parties, every single thing. And so the only question up until the point where you sign a contract is, is it worth making the time investment to continue to learn together? And pessimism is a wonderful tool at that point because saying, "I don't know what's going to happen. I don't know what this is worth," it's actually more than pessimism. It's a kind of, I'll call it, friendly skepticism. You've heard me so famous or world famous Intensive Test Drive a few times. Right, Corey?
Corey Frank (02:57):
Chris Beall (02:58):
And what do I say? I say, "I have no idea whether having a bunch more conversations is going to make any sense in your business at all. I have no idea." And I'm being honest. I too have no idea. It could be great. It could make you seasick. I don't know. I don't know, but it's pretty low cost. It's kind of like a zero-cost option for you, a little bit of time. It sometimes produces actual business value. Every once in a while it's a lottery ticket that pays off as Tony Sephonian said on his podcast when I was a guest. We made tens of millions of dollars during our test drive. Okay?
So maybe, but you know what I'm selling? I'm selling, "I don't know." And you know what my reps have a hard time selling? I don't know. They have a hard time saying, "I don't know," because they want to be the rep that says, "It's going to be great. It's going to be awesome. It's going to be huge. You're going to have a..." It could be that, whatever, right? I tell you what, it's a lot easier to sell I don't know and stand behind it than to sell huge.
Now, at some point they sign a contract. The beauty then is it's reduced to numbers. And now you're at the point of saying, "Okay, we're not just learning anymore. We're exchanging dollars. Dollars are going to change hands here." So somebody's got to put their career on the line to go get those dollars. So think about that person. How much of their career? Very much of it. We had a situation recently involving a very, very large company. It's a multinational, and they're headquartered in Japan, and their US group told us quite clearly, "Hey, guess what? At $27,000, we don't have to go to Japan for approval. At $27,001 we do." Right? So what do you think the first deal was struck at? And that's the stuff, that's why sales is not marketing.
Marketing can't take that into account in a generic way ever, because it might not even be a concept that plays, or it might play at a really high level, but it plays a high level in terms of design of a sales process. At this point, we ask ourselves a question. How much friction do we want in the deal from approvals? If the answer is zero, make sure the person we're talking to has the authority to approve the deal without going and talking to anybody else. If it's okay to have more friction, which by the way, shows up as both delay and risk, then it's some other number.
So there's a big difference also between deals and first deals, deals and next steps. We take educational learning next steps together for quite a little while. Then we transact. But that transaction itself should be sized not just to value, which is super important, but to what fits, right? And it's never smooth. It's always a step function. Right now at United Airlines, my understanding is anything over... I believe it's $50,000 goes to the CEO. Well, is anybody here dumb enough to offer United Airlines a $50,000 plus $1 deal? Because I can assure you United's CEO's pretty busy right now.
Corey Frank (06:11):
Right. I think we're all familiar with Aaron Ross and predictable revenue. I think that one of the things that Ross talks about is similar to what you were saying about PI, personal impact, earlier, Chris. Is that Aaron talks about ask yourself when you're talking to a prospect or a soon to be client, what can you eliminate, automate, outsource or delegate? And I think from the perspective of helping that... If I say, what can I eliminate, automate, outsource or delegate? Mike, your advice certainly would be to have something that's not just quantifiable, but also visual as well to really kind of contribute to all the senses and to do the job that a CFO or a VP of sales or whomever your buyer is to do anyway. Because if I got to sell to my boss after the sales person sells it to me, I got to justify it. If you can help me do my job by thinking in those languages, eliminate automate, outsource, or delegate, I'd imagine there's just going to be a tighter affinity there, even if my price is more because you're speaking my language.
Mike Gentsil (07:25):
Yeah, again, I think this gets back to the persona discussion where there will be personas that will absolutely be excited about that value proposition because they want to focus on the stuff that is the higher value added activities, and they know what those are. And I think where this gets tricky, back to Chris's point on what marketing can conceive versus what sales does, is there's a difference between an inbound prospect and an outbound prospect. And this is really important to kind of talk through here because if I receive a lead, an inbound lead, and they're looking for something very specific, I could come to them with this value prop of eliminate, delegate, blah, blah, blah, blah, blah.
And they might say, "Okay, that sounds interesting, but I'm just looking for something that does this." And that this thing could be walk like a giraffe. "And we think your website says you have a tool that walks like a giraffe. Can you show me that feature?" Well, that's what that person is trying to buy today. And this aspirational, visionary stuff around eliminating, delegating, et cetera, et cetera, might be interesting to somebody in that organization, but this person today wants this specific feature set. And so when we're coaching folks on dealing with inbound versus outbound workflows, on the inbound side, you've got to play this dance. And it's a hard, hard job to figure out what the person really is interested in learning about. They called you. They're taking their time to meet with you and address that need, but also educate them. And this gets into challenger sale a little bit where I'm teaching, tailoring, taking control of the conversation.
You have to address the things that they care about, but then educate that they also have these three other problems that cost X, Y, and Z, which may be solved by delegating and eliminating, et cetera. But we also do the thing that you want. That value prop then has elements of quantification that solve the current problem, but then solve these other problems. Whereas in an outbound workflow, somebody may not be looking for you car doors that open like this. The person is not looking for that, but you send them a video of car doors opening like that. And you give them an image and a vision so they can do things differently that they never imagined. And that delegating thing just happened to hit them at the right time. They weren't looking for that service, but you hit them with the right image and the right word and the right quantification of that.
So where it gets fun, frankly, is enabling people to experiment. They're using tools, outbound tools like Outreach and SalesLoft and Yesware, et cetera, that are giving me the ability to do this rapid experimentation. And what we're trying to insert into that for these outbound workflows is images and quantification and value that really make it come to life for that buyer that may or may not have a project that's got budget attached currently, but it can reach those aspirational, visionary things that may be latent. It's addressing that latent need that you may find budget.
Chris Beall (10:25):
This is brilliant stuff, Mike. The latent need might not be with that individual. It may be elsewhere in their organization. And what you're doing is you're actually letting them know that when that becomes the relevant part of the conversation, when they've got to go to Mary and Joe and Marissa and have that conversation, you're giving them something that they can be confident in, even if they don't care about it at all. And there's a technique for doing this in sales that salespeople, I think, would be wise to learn. And it goes something like this.
So, Mike, as far as I can tell, the only thing that you care about, the only thing at all that we do that could even move the needle in your business is we help you see how your sales reps are doing at home. That's it, because you had to send them all home and it's a nightmare, but we do these other three things that sometimes people get pretty excited by. And I just want to make sure, because I think they have no relevance to you whatsoever. And then I'll tell you the other three things, and you feel good because I've recognized that you don't care about those three things, which means... Because if you never tell somebody what you think they don't care about, they'll think that you're just smorgasbording them.
Mike Gentsil (11:45):
Chris Beall (11:46):
Like, "Oh yeah. You like the salmon," right? Therefore I'm going to assume that you also like whatever it is, right? The soft cheese. But it turns out that if I say, "Mike, I suspect the salmon is really your thing and the soft cheese just going to make you sick."
Chris Beall (12:41):
"You really hate that stuff. But it turns out we have really great soft cheese here. And am I right, that you just can't stomach that stuff, that it may as well be a pregnant person because soft cheese really doesn't work for you?" And you go, "Wow. Chris actually understands me." However, Mandy is into soft cheese, and now I have that in my pocket, which by the way, don't ever do a soft cheese. But this is where I think a lot of times, Corey, this goes back to my analogy of the dog and the meat and the chain link fence.
Salespeople make, by and large, average salespeople make this mistake repeatedly. They make the mistake of going for the win before the game is even set up. They just go for the win right now. They go for it. Like, "I got Mike, I'm going to pander to Mike, I'm going to cater to Mike." But even if Mike's the CEO, which in this case he is, Mike's got other people he's got to deal with. And say Mike's CFO happens to be a pushover when it comes to cost savings of a certain kind, not unit price, not value oriented, but just chunk size. He's a chunk size guy. He's looking at the amount of money in the bank and going, "I'm not very comfortable when we get above a $23,000 investment at a time."
And so if I said to Mike, "Mike, one of the beauties of ConnectAndSell is you can actually get in the game for 9,500 bucks and find out if it makes any sense to you." And Mike's thinking, "I don't give a damn about that, but my CFO just might care about that one. Thank you for arming me for future battles I'm going to have to fight." Because in sales 98.3% of all of the battles are being fought internally. They're not you. You're not on the other side with your champion. You're on the same side with them. They're on the other side with a whole bunch of skeptics who haven't heard what you have to say yet.
Mike Gentsil (14:42):
Corey Frank (14:42):
Mike Gentsil (14:43):
I do a variant of that technique, Chris, where you said these three things probably don't apply to you. I say a version of that, which is, "If you can spare five more minutes, I'd like to show you two other things. One to two times out of 10, this is the coolest thing that people have seen. I don't know that that's going to apply to you, but I'm only going to ask for five minutes." And then you show it to them and they're like... Then they go down the path. "Huh, that's really cool. Bob would be interested." And often it's actually more than one or two times out of 10. It's closer to three or four or five, but you've got to give them confidence that what they're going to see isn't going to take a lot more time and you're not going to go too far afield from what they cared about.
Chris Beall (15:19):
Yeah. The number one reason that enterprise sales fail is that your champion loves you, but doesn't have enough confidence to put their ass on the line in championing you all the way through.
Corey Frank (15:30):
And then keep that, following that statement, what generally happens as a salesperson. And we can finish up by talking about discounts, right Chris and Mike? So I would imagine my champion loves me not enough to put faith in my solution because I didn't arm him with enough data. And instead I'm going to panic as the sales rep, try to panic and pop smoke here. And I'm going to try to drop my pants and drop the discounting lever to try to give him a little bit of ammo to grease the skids seemingly when that may not be important at all.
And so can we say to that, I mean, is there an atomic weight, like we say to these ROI elements of hard cost savings and risk mitigation, et cetera, that Trump's discounting? Is there this natural force where the unseen force, the sales manager who's managing that sales rep, they're only hearing from the sales rep that, "Hey boss, if we get another 10% or 15%, I think I can get the deal from Mike." When the reality is, is they haven't been speaking the language that Mike needs to perpetuate this value prop throughout his organization.
Mike Gentsil (16:45):
Yeah. I see a couple variants of discount requests. One variant of a discount request is there simply is fixed budget. The CFO has told the head of marketing, "You've got a hundred thousand dollars to spend on marketing this quarter. You can spend that however you want." And the CMO says, "Okay, well I've already spent $75,000. I've got $25,000 left to spend. I can give you 25 or I can't do the deal." Now, theoretically, you could say, well, let's go back to the CFO together and try to get more money. That's theoretically possible. But the CMO is probably not... They can do that maybe once a year with a CFO. And they're just not going to want to play that card today for this product that they haven't used before. So that's variant number one, they've got fixed budget, and we address that a certain way.
The second is there's a competitive offer, which actually is less expensive. And so you'll say, "Hey, your offer is $40,000. I've got a competitor over here that's charging me 25. I like you guys better. But my boss, my boss's boss said 'Well, listen, money is tight. Let's spend 25K.' And if you can't match it, I'm going to go with an inferior but less expensive alternative." And that's a tough one to sell into. And that's where ROI tools... I'm going to address this one first, can be very, very effective because you can, in that case, put a picture in front of both of those folks in the management chain that says, yes, the inferior offer is 25,000, but the incremental value that you're getting for this incremental $15,000 is $2 million because we have these features that they don't, and we cannot discount. We're sorry, and it's $2 million in incremental value and that might win the deal. And that's high stakes poker. But that is a good way to preserve your price when you know that you have incremental value. If you're selling a commodity, it's a little bit trickier.
In the first case where there truly is fixed budget and you believe your buyer, and that's what they say, then what you try to do and what we coach and we do this a lot ourselves as is construct a multi-year deal, a two or a three-year deal, which escalates. Say, listen, understand you've got fixed budget right now. We both agree on the value of the solution, if it works, is $4 million. Right? Right. Great. Well, let's give you the price today, but we're in this for the value that we're delivering. So let's construct a two or a three-year deal where we're going to get to those bigger prices if those metrics are hit in the first year. We both got skin in the game. We're going to go for those metrics. And if we get them, we're going to go to the next level next year. Right?
You can get that deal done. Sometimes, in that case, you do have to meet with the CFO and walk through it, but that's a good conversation. You want to establish that. Those are the two main ones. It's less, somebody just shows up. It's like, "Ah, you quoted me 20. How about 17,000?" I don't see that as often. I'm not sure. It's not the buyer's money in the first place in a business, in an organization. It's more, if they're moving budgets around, then they've got realities there. But that's what I see. Chris, do you see a third variant or how do you address those?
Chris Beall (19:58):
Well, one way to address them... I love both those. One way to address this whole discounting question is to make it abundantly clear that you are the lowest risk party to deal with because you have the expertise and the skin in the game approach. That's going to provide a kind of guarantee that the individual that you're dealing with is willing to buy off on and to allow that, and the chunk size question, of course. I mean, there are budgetary chunk-sized questions. They just exist out there. So try to preserve your unit price while adjusting the chunk size. When you're doing this, think about this all the way back to when you think about your product. If your product doesn't have any units in it, then there's no unit price. And if there's no unit price, well, you got a problem, right?
So if somebody says, "Oh, I only got 25,000," well, it turns out that really we get the best results when we only work with a subset of the users and then I'll come all the way back to adoption. Your VCs might hate you for only taking on 100 users instead of 1,000, but there are 100 best users by definition. This is just-
Mike Gentsil (21:11):
Chris Beall (21:13):
Anybody who doesn't believe that, go to the calculus, right? Every function's got a minimum. So there are the 100 best users out there. So let's just say, look, we get the best results this way. And we actually prefer to start smaller because that way we can focus on getting the best business results, measuring them carefully and making sure, before we go to higher levels of adoption, that we have solid results, solid processes. You're doing your part, we're doing our part. What do you say we fit this deal inside that? Now your unit price stays right where it was. Your chunk size is the right chunk size. It's very rare that somebody has a unit price budget. It's very common that they have a chunk size budget. So work with it.
Mike Gentsil (21:55):
Yeah, that's smart.
Corey Frank (21:57):
Wow, this is just a great step. Chris, I don't know. I think you probably agree with me that in the Beatles world, right, as an analogy, I think Mike Gentsil is the Brian Epstein of the Market Dominance Guys here. So he's the force behind the force. And, Mike, we'd love you on anytime that you're free. This is great. You clearly speak our language. And, man, I think we have a whole couple of new chapters in the Market Dominance Bible here that Mike just wrote in the two sessions we had together. So we appreciate that very much, Mike.
Mike Gentsil (22:29):
Thank you, Corey. Really enjoyed it. Thanks, Chris.
Chris Beall (22:32):
Thanks, Mike. This was tremendous. And thanks, Corey, as always, you seem to have come back from the brink of death, and you're back with us. You know what we say about all dead companies, they're equally uninteresting, but you know-
Corey Frank (22:43):
Chris Beall (22:44):
... not all dead people are like that, but we still love you a lot.
Corey Frank (22:48):
Well, as I think the quote goes: I wasn't dead. I was just in Texas.
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