Selling Contact Center Software - The ROI Factor

Transcription

1 OVERCOMING NO DECISION: VALUE SELLING IN THE CONTACT CENTER By Alex Corman, Technology Partners INTRODUCTION You may do everything right. And yet even so you may lose the deal to no decision. Effectively selling contact center software is no different from selling any enterprise technology solution. You might prove that you offer the most feature-rich solution in the market. Your demos may overwhelm and impress your audiences in IT, marketing, customer care and the executive suite. You may offer competitive pricing, reliable delivery via the cloud or on premises, and expert professional services to get the customer up and running. You may meet every requirement of the RFP, and build consensus across every level of the organization. The fact is today s buyers are more beholden to bottom line profit than ever before. And if you can t convince decision makers that purchasing your contact center technology will have a positive financial return to their company s shareholders, then there s a good chance you re just spinning your wheels. So how do you persuade your customers that purchasing your technology will enhance divisional or overall profitability? The answer is in effective value selling, or in demonstrating the financial value of your solution not only in the abstract, but specifically in their environment. We at Technology Partners have advised our clients on over a thousand deals in the contact center this paper summarizes many of our key learnings as they relate to value selling. Improved Close Rates Reduced Discounting Accelerated Sales Cycle This paper will present and discuss value selling elements that can be deployed to overcome no decision, and to win business in the contact center: ROI, value slides, opportunity matrices, and extended payment offerings. Copyright 2014 Technology Partners. All rights reserved. 1

2 The cornerstone of value selling is demonstrating the projected ROI, or return on investment, of your technology if purchased by the customer. If you can convince an executive sponsor that purchasing your technology creates, rather than depletes value compared to doing nothing or purchasing a competitive product, getting a signed PO is the most likely outcome. If you can t, or if you don t try demonstrating ROI you ve left the success or failure of your selling effort to factors outside of your control. We ve discussed some general strategies on how to build an effective business case in other documents. In this study, let s first focus on multi-use ROI calculators versus custom business cases as applied to selling contact center technology. ROI CALCULATORS Re-usable ROI calculators can be an effective way to demonstrate value. Typically they require gathering a handful of data points sometimes as few as twenty or perhaps even less than that. ROI calculators tend to be most effective if you re selling a point solution (instead of a multi-product platform). When sufficient user training is delivered, ROI calculators may be leveraged by sales executives or solution engineers directly without direct support from an internal or external value engineering organization. On the other hand, they can also easily become shelfware, or a hurdle that only serves to complicate the conversation with the customer if not built, deployed and supported intelligently. The best ROI calculators are visually-engaging, clean and simple. They are not overly ambitious it is not likely that a solutions engineer or sales executive will have the time or inclination to enter dozens of values across several tabs. Too often we ve seen companies launch to great fanfare an ROI calculator intended to be all things to all opportunities, only to see it groan under the weight of options and inputs and be ultimately abandoned by daunted sales executives. Some opportunities are indeed complicated, and require gathering of dozens or hundreds of data points and building of custom benefits specific to the opportunity. For those opportunities, using a ROI calculator is like trying to build a Copyright 2014 Technology Partners. All rights reserved. 2

3 skyscraper with a hammer. But a simple ROI calculator one that gathers only a few critical inputs (e.g. call volume, number of agents, etc.), leverages modifiable industry assumptions (e.g. agent compensation, average handle time, etc.) and relies on a limited set of call center benefits (e.g. reduced handle-time, reduced transfers, etc.) can be just what you need to generate a rough order of magnitude ROI, to confirm key discovery metrics, and to refine as the sales cycle progresses by updating assumptions and critical data points. When presenting ROI to a call center customer, whether derived from an ROI calculator or from an opportunityspecific analysis, the underlying math can be more complicated than it may appear. In particular, agent occupancy calculations can be tricky, as the denominator (agent available time) doesn t stay constant between current state and future state. Getting the math wrong is a sure-fire way to demonstrate that you don t understand the contact center. If you need help, drop us a line and we can walk you through it. It is also important to reconcile between benefits so that you re not taking credit twice for the same avoided agent time (e.g. deflecting a call, but also reducing average handle time). If you don t, you re exaggerating your benefits and undermining your credibility. Again, we can give you some guidance here if you need assistance. FIELD-LEVEL SUPPORT / CUSTOM ROI ANALYSES Often a specific opportunity requires more than a simple ROI calculator offering a defined set of benefits. In those cases, you need a custom analysis that takes into account the particulars of the contact center environment and the specific benefits of your opportunity. For larger opportunities, multi-product sales, cross-channel engagements, or for environments receiving millions of customer contacts a month, a custom analysis is going to be necessary. Different sales organizations apply various strategies as they relate to field-level ROI support. Some are large enough to have their own staff of ROI experts, sometimes called Value Engineers, Business Case Analysts, and the like. Dedicated staff is trained in how to engage in a meaningful value discussion with the customer to derive the inputs needed to construct a persuasive ROI. Some sales organizations add ROI support to the duties of the sales executives, or require internal solutions Copyright 2014 Technology Partners. All rights reserved. 3

4 engineers or business/technical consultants to perform ROI work in addition to their prescribed duties. In our experience, this approach rarely works; reps, industry consultants and solutions engineers may be very skilled in their primary job functions. Expecting them to do a credible job in building a persuasive ROI is usually unreasonable. Direct sales staff may have a hard time finding the most up-to-date version of the right ROI calculators amidst the piles of sales tools and materials they are directed to leverage, or they may not remember their training months or years earlier. Or, as Michael Nick, author of The Key to the C-Suite and ROI Selling warns, salespeople will develop their own sales tools apart from corporate culture and without input or control...which is just a bit scary. Or while direct sales staff engages in ROI discussions, other required elements of the deal lapse and the deal slips. The final result of expecting reps and business consultants to execute value selling often is that an ROI is not done or is done poorly, jeopardizing the deal. Other organizations hire third party ROI support from companies like Technology Partners. Such companies can leverage experience and best practices from other clients to present the most convincing ROI product. They can also offer variable capacity on demand and don t lock companies into paying for fully-burdened employees. They also have a potential advantage in the way they present themselves to the customer; as a third party not eligible to earn commissions; they have more neutrality than a member of the internal account team. Leveraging third party providers can also helpful in transferring knowledge and best practices if the company intends to ultimately bring the function in house. No matter who is producing the ROI analysis and no matter what tools used to build it, we offer these best practices in building an ROI in the contact center: Best Practices in Demonstrating ROI in the Contact Center Show scenarios to reflect the range of potential impact (e.g second reduction in handle time) Label inputs appropriately so it s clear where you are working from real data, or from assumptions Be transparent in your calculations. Copyright 2014 Technology Partners. All rights reserved. 4

5 With regard to the third suggestion, a word of caution: online calculators tend to hide their math, and make it impossible for reviewers to judge how a value is calculated. No self-respecting CFO would authorize a purchase based on a black box calculation and you shouldn t expect them to. The final ROI output should show a clear cash flow over the relevant period, one that takes into account all of the previous assumptions and data points, and gives users the choice of multiple benefit and payment scenarios. VALUE SLIDES Most of the conversation around ROI is on the topic of benefits, also known as use cases. Benefits are a depiction of the financial difference between the current state in the contact center without your product, and the future state with your product. Benefits should always demonstrate clear and conservative math so that reviewers may understand how you arrive at your financial projections. In our experience, the best ROI analyses should depict between five and ten benefits fewer than that may not be enough to generate enough financial impact to justify your product s cost; more than that and your risk losing buyers attention or appearing desperate. So the benefits must be quantitatively clear. But the benefits must also qualitatively understandable your customer must understand how they will earn financial benefit and the role your product plays. For some benefits, it s obvious; if you are going to convert some agent-handled calls to self-service, it s clear how that results in cost savings. Other benefits are more abstract, and it can be unclear exactly how you re projecting benefit. A lack of clarity leads to the failure of a business case, and is therefore something we must address. A value slide may be exactly what you need to explain how a benefit will be realized if they purchase your product. Over the years we have had success in illustrating benefits pictorially telling the story in a visual manner that supports and extends the financial justification, as in this sample: Copyright 2014 Technology Partners. All rights reserved. 5

6 On the left side (representing the current state) sales are lost because an outbound sales rep isn t aware of buyers needs as expressed via social media. On the right side (representing the future state) our outbound sales rep is alerted to a selling opportunity thanks to our technology product, which gives the agent the pertinent details to make it most likely that the deal closes. stubborn insistence that algebra remains fun well after high school. In our experience, value slides are made even more useful when you clearly depict the math behind the benefit calculations in the ROI as depicted on the bottom of this sample. This element represents our OPPORTUNITY MATRICES What if the benefits that you can bring are qualitatively clear, and the math behind the calculations are simple, but you have no current state data to use? For example, what would you do if customers don t have the numbers you need, or (more likely) they have them, but aren t willing to share them with you? In those cases, we often build business cases based on data from representative samples within the customer s vertical. Those documents can help advance the value conversation, and sometimes they are all we need. But what if our representative samples are far removed from the reality of the customer s contact center? It s possible that our ROI will fall apart. In those cases, we sometimes build an opportunity matrix to express value without knowing the particulars of the current state. Our usual approach is to build a single matrix for each benefit, with a range of current state call volumes on the y-axis, and a range of future state improvements on the x-axis. Looking at this example value matrix representing increased Copyright 2014 Technology Partners. All rights reserved. 6

7 self-service, a customer can quickly gauge the range of potential financial impact with our product, even without our guiding them to a particular number. EXTENDED PAYMENTS A final piece of the value selling puzzle is offering extended payments as part of a customer finance program. The primary reasons for offering extended payments are clear: if a customer lacks budget in the current budget period, or if they want to align payments with the realization of benefits, extended payments overcome what is often the final objection before a purchase order is signed. Extended payments can often improve the key financial metrics summarized within the ROI. The return on investment metric itself would be the same as in an upfront payment if financing costs are borne by the vendor. But NPV (net present value) almost certainly is higher when the customer leverages payment terms, and the payback period (the length of time required for their investment to become profitable) is typically one or several months faster. For a prospect that requires favorable key financial metrics in a business case in order for a deal to be approved, offering extended payments may be a requirement to overcome whatever financial thresholds stand in your way. Some companies choose to manage their customer finance programs on their own despite potential disruptions to cash flow and delays to revenue recognition, as well as the need to hire an in-house collections organization. Others engage Technology to manage their programs. A third party provider may have access to a variety of lenders with experience in lending to customers across a wide range of credit profiles. No matter who is managing an extended payment program, whether internal or through a third party provider, some best practices apply: the most effective customer finance programs do not penalize sales executives for Copyright 2014 Technology Partners. All rights reserved. 7

8 offering extended payment terms. So called no carve programs recognize that it is in the vendor s best interest to offer extended payments, and to not discourage salespeople from offering the very element most needed to close certain deals. To compensate for the interest costs, we recommend uplifting the first price offered to the customer to account for interest rather than taking a revenue hit. And we also recommend offering extended payment terms early in the deal conversation to avoid last-minute scrambles that could ultimately scuttle the deal. CONCLUSION We hope that this guidance has been helpful as you try to improve your capabilities in value selling contact center technologies. In our experience earned over a thousand contact center deals on which we advised our clients, companies that execute value selling well have a better chance at overcoming no decision and have a distinct advantage in competitive situations. By offering a full suite of value selling elements, including ROI calculators and field-level support, value slides, opportunity matrices and an extended payment program, sellers of contact center technology are in the best possible position to win the greatest number of deals at the highest possible value and with the shortest possible sales cycle. Want to know how to start or enhance your value selling program? We d love to answer your questions. us at info@tfpllc.com or call at and we ll be happy to give you more detail. Copyright 2014 Technology Partners. All rights reserved. 8