In my last blog, I talked about the often-overlooked role of insight in creating persuasive content. In particular, companies that pursue engagement as defined by social media tend to produce content that is too similar to everyone else's for it to be persuasive. This post examines another essential factor that companies tend to miss: value and its role in persuading customers to purchase products.
In a new piece of analysis, Forrester Research studies a common misunderstanding by service providers of how their customers derive benefits from their products. We all have strong views on why our products are great and what we think compels customers to buy them. But as Forrester's analysis tells us, companies' perceptions of the value of their products are frequently misaligned with customers' experiences.
This finding leaped off the page because it's consistent with one of the major findings in this year's 20 for 20 White Paper - that vendors, particularly vendors of technology, tend to misunderstand the nature of ROI and its role in persuading prospects to purchase products.
The Value of Multifamily Technology Solutions
The central observation in 20 for 20 came from asking the 20 senior executives how they justified spending money on technology-enabled projects. We asked about four types of multifamily technology solutions (leasing, data analytics, resident fintech and connected/smart communities), which made a total of 80 different sets of technology decisions. While the executives provided reasons that justified their projects, not a single project was justified based on a numerical calculation of ROI.
This finding is deeply counterintuitive for most sales and marketing professionals, whose training usually places the central focus on the financial benefits of their solutions. "Lead with the figures" is the common mantra for sales presentations. But the more conversations I have with buyers, the more I learn that that is the wrong focus for persuasive content. Value is something other than the outcome of the arithmetic in a sales ROI spreadsheet.
The fascinating finding of the Forester Paper is that organizations, as they put it, "don't understand how their customers derive value" and that they measure using "flawed proxies" of value.
The Danger of the "Flawed Proxy" of Value
My observation in 20 for 20 was that sellers tend to see ROI as a number: NOI increase, cost reduction, etc. Buyers, on the other hand, see it as a rationale. For example, they might think they want to drive leads to the highest converting channel. But that doesn't entail having a specific number of leads or specific percentage conversion rates they're trying to achieve. Buyers want you to persuade them of how your product helps them improve rather than show them numbers based on your predictions and assumptions.
To restate this observation in the language of Forrester's model, financial lift is a flawed proxy for the value that will ultimately make a buyer opt for your product.
In proposing a better alternative, Forrester describes four different sources of value: Economic, Functional, Experiential, and Symbolic value. The economic value is the one most people seem to understand. Functional value describes the capabilities the product enables that you would not otherwise be able to do, at least not as well. Experiential value is about how using the product makes you and your organization feel, and symbolic value is how well the values and brand of the vendor and customer align.
Becoming a Mind-Reader
When you combine these four sets of drivers, three of which are not primarily economic, you can develop a much richer understanding of how prospects and customers derive value from products like yours. To do it, you have to get inside the head of the person you're trying to sell to and be prepared to take on different and often conflicting perspectives on the real value drivers.
The more thoroughly you understand what is truly driving the decision to buy your product rather than somebody else's, the better you can tailor your content to your audience. And—crucially—the less dependent you become on the spreadsheets and the simplistic numerical ROI statements, which are usually not as persuasive as we may think.
Forrester proposes a highly structured process for identifying value drivers and measurement, and it reminds me of the concluding advice I drew from the 20 for 20 research. When trying to persuade a potential buyer, remember they have their own a priori ideas about what makes their business improve.
Those ideas will frequently differ from yours and even more frequently have nothing to do with the ROI estimate you prepared. It's the job of sales and marketing to understand those ideas and engage with them because that provides the foundation for a persuasive conversation.