In an increasingly competitive and skeptical marketplace, most vendors vie for differentiation and positioning through buzzwords and hype. But how much is real? In a down market, ETBs (End Users/Technology Buyers) are more cynical and skeptical about the products in the marketplace hyperbole becomes the first casualty. In addition, as today's ETBs increasingly turn to the analysts for decision making insurance, vendors should expect more challenges from the analysts about their claims of product superiority, business benefits and economic feasibility.
What's real? Counters for the dog and pony show, the tap dance and the magic act lie not in more "smoke and mirrors," but in econometrics - the use of statistical methods in the study of economic data and problems. It is literally a mixture of economics and metrics, a new kind of economic measurement.
So, as marketers, if we say our products are bigger, better, faster or cheaper, we also need to be able to prove what we say in economic terms, using standards of measurement that are valid for our industry. When it comes to putting this in front of the analysts, we must back-up our claims and have proof to show when the rubber meets the road.
In today's world, the analysts expect that any time your company makes a claim that points to economic gains or savings, you need to prove it. Examples of these metrics are claims that your product or service:
- Increases revenue
- Speeds time-to-market (saves money by saving time)
- Decreases costs of implementation and maintenance
- Improves security (cost avoidance related to security breaches)
- Reduces turnover (return on investment in employees)
- Increases productivity (increases revenue per employee)
- Contributes to raising shareholders' value.
Most vendors turn to customer case studies to provide the proof of these claims, but in many examples these do not do the trick - because in most cases customer success stories fail to convince the prospect that any measurable results occurred. Did you really cut costs in half?
Did you really double revenue? The only inherent proof in a typical case study is evidence of one good - contextually relevant - customer reference. To quantify the economic value of your products, companies must show how implementation of your product, service or solution translates into measurable cost savings, revenue or other benefits. There also needs to be a time element, a beginning point and an end point against which to measure the change or improvement.
What most case studies lack is the baseline against which measurement is made. More times than not, by the time a case study is written, no one can remember why the customer bought the product in the first place, and what happened when they rolled-out the solution and which relative measurements contrasting the new situation with the former one.
It is important to incorporate a method of capturing specific quantitative information about your customer's business problems, and what they did before you came into the picture. This should be part of the sales cycle. While that may be easier said than done, there are many organizations that can help to incorporate econometric processes into the sales cycle such as management consultants or large partner organizations such as IBM, Microsoft or HP, or even some specialized firms like Mercer Consulting. Additionally, you can turn to the analysts themselves - several firms have econometric practices like Gartner, Nucleus Research, and Forrester.
It is important to remember that the facts in your customer successes need to be real, observable, measurable and substantiated in economic terms, as black and white as the bottom line of a financial report. Some key things to keep in mind are: Develop proof points to substantiate product, service and company claims. A helpful mantra is "If you say it, prove it."
- Use economic metrics to measure financial claims, such as revenue growth or cost savings.
- Get a baseline against which to measure improvements.
- If you don't have the time, resources and expertise in-house, look to consulting firms or the consulting services of industry analysis firms.
- Be on the lookout for IT buyers who look beyond cost factors, and use value- based methods with them.
- Use case studies that are real, measurable studies and not just "customer stories".
- Use substantiated metrics with all your audiences, including customers, analysts, journalists, thought leaders and board members.
- Above all, do not use the same references over and over again. Develop a practice to continue to evolve and create new customer case studies.
Once again, and most importantly, if you say your products are bigger, better, faster or cheaper, make sure you can prove it in economic and realistic terms. Doing so will save you a lot of skepticism from the analysts, save your marketing and sales teams from a huge headache, and most importantly, save your prospects and customers from the hassle of trying to figure it out for themselves.
