The CXO and the VP of Services often bemoan the low attach rates of services in the deals sold to customers. The issue is not only a loss of short-term corporate revenue, but perhaps more importantly, the long-term impact on customer success and satisfaction – which impacts renewals and upsell opportunities.
Sales compensation is frequently cited as the root cause. If the sales force is not comped on services sales (or there is a lower commission) versus product sales, then the expectation is that sales will not put much emphasis on selling services. While this is certainly a valid argument, it is a self-inflicted wound that can be addressed by modifying the compensation plan. Perhaps the tougher reason for low attach rates is that the services were not positioned effectively during the sale. In this blog, we’ll explore a simple but effective way to better position services as well as products.
Customer Outcomes And Our Offers – “Connecting The Dots”
In a previous blog, found here, we discussed the relationship between customer outcomes, success metrics, and value. Even if we’ve sold to customer outcomes and success, too often customers have a difficult time understanding how our proposals and offers relate to those desired outcomes. This applies to the products in our offer but is especially relevant to the services.
If the customer doesn’t understand how the proposed services relate to their desired outcomes, they are typically viewed, at best, as a “nice to have.” At worst, the services are viewed as an attempt to unnecessarily pad the deal. When customers push back, those services are the first items dropped by the sales team. The root cause is that the salesforce did not effectively “connect the dots” between our offer(s) and the customer’s outcomes (see below).
By clearly showing how each element of their offer relates to one or more outcomes important to the customer, the salesforce will gain credibility and eliminate any doubts as to why those services and support were in the offer. For instance, if commitment dates are critical, implementation is complex, and our implementation team is experienced, it is perfectly reasonable to include these services in our offer.
Because services are intangible by nature, it is key that they are made more “tangible” or relevant by linking them to outcomes – that are important to the customer. For example:
- Faster implementation
- Reduced risk (or risk transferred)
- Improved or better outcomes
- Reduced customer manpower
By clearly linking our proposed products and services to the customer’s outcomes we will greatly increase the odds that the right services (and products) will be included in the final negotiated deal!
Steve is the founder of Value Lifecycle, a strategy consulting firm, with clientele representing over 100 diverse industries. He has over 33 years of experience in operations, sales, sales management, purchasing, and executive management. After working extensively on both the selling and buying side of the equation, Steve brings a unique perspective to the challenges facing his clients as they define and execute their business strategies. Steve have consulted, trained, and implemented both strategic and tactical buying and selling programs in all major North American market centers, as well as Europe, Asia, Latin America, Middle East, and Africa.