Abdelkrim Solutions Engineering Manager at Grafana Labs | Mentor | Speaker | Teacher | I write about distributed systems, solution engineering and craftmanship

6 reasons why Presales need to do Value Engineering

6 reasons why Presales need to do Value Engineering

The (Pre)sales nightmare

It’s Friday evening. You are in peace of mind yet your are working on the biggest deal of the region. Today you concluded a long POV and validated the technical win. But, your prospect sends you a quick, killer, email to inform you that they won’t be able to sign the deal. Their CFO doesn’t understand why they should spend this money on yet another solution.

Wait, what, .. What about the pains we talked about? And the compliance risks with the new upcoming law? You rewind the last 2 months of discussions in your head to see what did you miss in the process. Most importantly, what can save your deal?

Value Engineering?

In a nutshell, Value Engineering (aka value management or value consulting) is a set of tools, processes and sometimes people that you leverage in your sales motion to shift the discussions from the technical aspects to the value of a solution. It’s an analysis that helps you build an executive readout to get the customer buy-in as you go up the pyramid of decision makers from the direct stakeholder to execs such as a CFO or a CEO. You can read more about it in this recent article from the Presales Collective blog

Why Value Engineering?

In the last years, I have been fortunate to work on several strategic deals where Value Engineering was a key success criteria. Over the years, Value Engineering helped me in several ways that I resume in the following points.

Increase the win rate

VE is very powerful in getting the executive sponsorship that you need to win a deal. I found it a key differentiator in the eyes of my customers when they compare us to the competition. It gives your champion the best tool to advocate for your solution.

Expand the deal size

I have often seen Account Managers commit a small number for a deal at the beginning of the quarter to reduce the risk of missing their forecast or because of the lack of qualification and confidence. Unfortunately, this initial number shapes the spirit of the deal and ends-up the target that everyone works to achieve. By doing the VE analysis, I have realized that we are bringing tens of millions of cost reduction or new revenue to some customers. This helped the sales team be confident in our solution and go ask for millions instead of tens or hundred thousands dollar deals.

Accelerate the sales cycle

This one is counter intuitive. Lot of people think that doing a VE exercise will add sales cycles but it actually avoids the customer spending several weeks of self-assessment, benchmarking or building a business case. In my experience, my customers were grateful that we helped them build their business case and they happily helped us accelerate the closing.

Earn the right to talk to the Business or execs

In the last 6 years, I have been selling Big Data platforms. These are powerful but complex distributed systems that are used underneath business applications. Customers automatically put us in front of IT and data architects and it is challenging to get to the business people. By positioning VE workshops, we succeeded in shifting the focus from technical discussions to business value discussions and we were introduced to the final users and stakeholders. This often changes the dynamic of the deal and opens many doors for future deals.

Enterprise vs Open Source

This is not a generic benefit, but it was key for me. When you sell 100% Open Source Software, you are mainly selling something that everyone can get for free. It’s like selling fish in the sea. VE helps you quantify the value that the customer will get from using your enterprise feature and support compared to DIY.

Protect the renewal and increase the consumption

With the emergence of SaaS first products, retention rate becomes a critical KPI for every sales organization. Every year (month?) becomes an election year. Even if your solution works, you can be sure that your customer is evaluating the benefit of renewal vs going with your competitors. They are also evaluating several scenarios where they can increase or decrease the consumption of your solution. VE gives the tools to do value realization assessment and show to your customer how much value you are bringing to the table. At the end of the day, this is the best strategy to guarantee your renewal and increase the consumption.

What’s next?

I’ll stop here and let you ponder on the value of value engineering :) I hope that these 6 reasons get you excited and you want to learn more. In the next blog, I’ll share with you concrete examples of value studies as well the best practices that I’ve seen working in the field. In the meanwhile, stay safe and keep selling.

Thanks for reading me. As always, feedback and suggestions are welcome.

Post photo designed by Long Truong on Unsplash

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