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22.12.2015 09:49

Your innovative solution is only as good as how well your customer understands its value

Filip Franck, Senior Analyst

A common problem in industrial b2b sales is customers recognizing the technical strengths of a supplied product but not understanding the value it brings their business. Customers of industrial technology products tend to only be made aware of the technical strengths (and weaknesses) of the product and are left to figure out the impact it will have on their business, earnings, and risk themselves. And why blame them? Take a look at most any industrial company’s marketing pamphlet or product catalogue and you’ll note that emphasis is more often than not solely put on technological characteristics of products without addressing how they bring about business value to the customer who is supposed to invest in them.

Changing or creating the customer mindset is key

When it comes to conventional industrial technologies, customers have often developed their own tools to calculate the business impact of investing in the products available to them. They have established an understanding of how the characteristics of a product impacts on business profitability. However, when it comes to innovative technological products, increasingly complex products, when the product is tied to a service (what some may call “solutions”), or when the customers are inexperienced or new players, the investment profitability and business impact is unknown or blurry at the least. The customer’s mindset needs to be changed, and this is key in gaining acceptance for and a common understanding of an innovative technology and the value it can bring.

Show your customer the innovative and competitive business impact of what you’re selling

So what does this mean for b2b sales of innovative technological products or solutions? For a seller to be competitive they must be able to demonstrate the value that their product or solution brings the customer.  Why? Because more often than not, the customer will use their established understanding and existing methods based on conventional technologies to evaluate a new solution’s business impact. They will often end up comparing it to other conventional technologies they are familiar with, and they will most likely not be able to develop a clear understanding of the added-value your innovation can bring. Ultimately, they will not evaluate “apple-to-apple” and when they are doubtful they will revert to the only tangible and easily understood element at hand; cost.

However, this is not the customer’s fault. After all, if you are a sales person, it is in your interest to sell your customer something innovative and more complex, which will naturally be unfamiliar to them. And if you can’t tell them what value this brings them, how can you expect them to know it?

My message to b2b sales people out there is to always put customer value in the driver’s seat of your sales pitch (and place cost in the trunk). Your primary goal should be to make your customer understand the business value that your product brings them and how it differs from conventional and competing products; cost is self-explanatory. 


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Example: A new market player

Together with one of our clients we were working with the sales of their products and services to a new customer. This customer was also a new player on their market, in the respect that they had previously only sold their services to other market players but never themselves owned any physical ‘money-generating’ assets on the market. However, they saw that their specific knowledge on the market dynamics could come to use in also owning their own physical assets.

Our client is a provider of a specific type of technology which suited this customer very well. In addition, our client provides services that go along with the product, in order to give it a fully functional guarantee throughout its operational lifecycle and maximize the earning potential of the product. However, because the customer had never invested in these products before, they had no established ways of assessing their earning potential, investment profitability, or lifecycle value. Therefore, together with our client and the customer, we engaged in demonstrating this value through thorough market analysis and detailed modelling of how the product could generate profits for the customer in the upcoming years. Taking into account all the expected cash flows throughout this time period, an investment profitability was calculated which was accepted by the customer.

The customer understood the logic of how cash flow was generated because it was clearly demonstrated to them and was the main topic of our dialogue. They understood the market analysis and model because they took part in making it and verified it regularly. The customer’s mindset was tuned towards the products and services that our client was selling and their competitiveness on the customer’s market. As a result, the customer was ready to invest.

PBI blog posts on value-driven sales

In short, your innovative, complex, and unfamiliar product/service/solution will only be sellable and competitive if it brings business value to your customer and if they understand it. In my upcoming blog posts I will address how to go about developing an understanding of the value your solution has for your customer’s business and how to deliver this understanding (a.k.a. the value proposition) to your customers through value-driven selling.


Filip Franck is a Senior Analyst at PBI. He is specialized in the energy industry and power markets, working in strategic consulting projects with industrial market players and stakeholders.


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