Authored by Michael Plaskow, CPO and Co-Founder, Ecosystems.io
Executive Summary
In the evolving landscape of B2B sales, the conventional practice of value selling is being transformed by the advent of artificial intelligence (AI) and collaborative strategies. This white paper presents the findings from a comprehensive study centered on the integration of AI and collaboration in value-selling processes, revealing the empirical influence of these components on deal closure rates and offering a new paradigm for sales strategies in the digital age.
Key Takeaways
Win with Collaboration
There’s a significant correlation between collaboration, both internally within sales teams and externally with customers, and the likelihood of closing deals. Internal collaboration increases the odds by 2.4x, while external collaboration increases it by 3.4x.
Tailor Your Value Proposition
Customizing value propositions based on customer contexts is essential. The level of tailoring in value assessments positively correlates with sales achievements, emphasizing the importance of customer-centricity.
Value is More Than ROI
Traditional metrics like ROI don’t strongly correlate with winning deals. The effectiveness of value selling relies more on qualitative engagement than quantitative assessments.
Harness AI to Reinforce Best Practices
Leveraging AI can significantly enhance sales outcomes. By analyzing data from value assessments, AI can accurately predict outcomes and provide guidance to sellers, improving their chances of success. Needing only visibility into value assessment activity, machine learning proved to accurately predict the outcome for more than two out of three deals (68% accuracy).
Introduction
The objective of this study was to empirically investigate effective behaviors in B2B sales opportunities leveraging a value assessment and the effects of collaboration (both internal within sales teams and external with customers) on the success rates of deals. With a growing emphasis on data-driven approaches in sales, this research aimed to provide actionable insights that organizations can leverage to enhance their value-selling efforts.
What is a Value Assessment?
A collaborative document, shared between provider and customer, to quantify and track the business value of deploying the provider’s products and services.
Methodology
The study analyzed an anonymized data set of 2,960 sales opportunities from five mature B2B SaaS technology providers of varying sizes ($300M to $8B). All opportunities involved a value-based sales approach and were associated with a definitive sales outcome. In other words, clarity on if the deal was won or lost. Key variables examined included the following data related to the value assessment tied to each opportunity:
- Collaborators (internal versus external)
- Number of collaborators who only viewed (internal versus external)
- Number of collaborators who modified inputs (internal versus external)
- Total views (internal versus external)
- Total number of changes to value assessment inputs (internal versus external)
- Number of quantified benefits
- Number of quantified benefits with inputs that were changed
- Event timing (create date of value assessment versus create and close dates of opportunity)
- Investment and financial metrics (ROI, NPV, Cost of Delay, IRR)
Through training machine learning algorithms on patterns of ‘won deals,’ also known as the target function, the research sought to empirically identify best practices and effective behavior in value selling.
Research Findings
- Collaboration is King
- A Tailored Value Proposition Holds Greater Sway
- It’s more about the Conversation than the Math
- AI can make the Best Practice, Common Practice
Collaboration is King
The analysis revealed a strong correlation between the level of collaboration and the likelihood of closing deals. Specifically:
- When a value assessment involves internal collaborators, the odds of winning the deal are 2.4x higher (than if there is no collaboration).
- When a value assessment involves external collaborators, the odds of winning the deal are 3.4x higher (than if there is no collaboration).
While the roles of internal collaborators can vary (such as AEs, sales overlays, sales managers, and professional services), embracing the larger ‘team sell’ consistently correlates to good sales outcomes. The significance of internal cooperation in securing deals was second only to external engagement, indicating customers leveraged cloud collaboration to access and immerse themselves in the evolution of the value assessment.
A Tailored Value Proposition Holds Greater Sway
Following collaboration, the next best indicator of an effective value-selling engagement is the extent to which the value assessment was exercised. The level of tailoring in value assessments showed a positive correlation with sales achievements, indicating that adapting and customizing value propositions based on customer contexts is essential.
Interestingly, the best indication of a good sales outcome is not the overall quantity of adjustments made, but rather the diversity of benefits altered, such as productivity, revenue, cost, risk, and ESG. Emphasizing customer-centricity and personalized value propositions demonstrated a distinct link to securing deals.
It’s More About the Conversation Than the Math
Equally intriguing as identifying the factors that contribute to good sales outcomes is discerning the factors that bear little influence, or even serve as false flags. The analysis revealed that traditional metrics, such as ROI, did not strongly correlate with winning deals, indicating that the effectiveness of value selling relies more on qualitative engagement than quantitative assessments.
Put simply, more important than whether ROI stands at 100% or 500%, is the thorough exploration and refinement of the value proposition, alongside the active involvement of both internal and external stakeholders.
Expanding the Use of AI: Make the Best Practice, Common Practice
Armed with empirical evidence on best practices for leveraging value assessments in the sales motion, Ecosystems posed a question that introduced a second dimension
to the research:
"Could machine learning, once trained, forecast sales results for deals in flight and provide guidance to sellers to enhance their chances of winning?"
To answer this question, Ecosystems turned to ViViEN™ (Virtual Value Engineer), an AI agent within Ecosystems’ SaaS value-selling platform. Through ingesting signals from value assessments (including collaborators, views, number of modifications, breadth of the value proposition, and the timing of activities throughout the sales cycle), ViViEN™ accurately predicted the outcome for over 68% of deals.
For comparison, CSO Insights benchmarks the average win rate for forecast deals at 46.4%.
Upon identifying deals deviating from ‘Best Practice’ in value-selling behavior, AI can course-correct sellers through in-app coaching. This two-step approach, which Ecosystems terms “Make the Best Practice, Common Practice,” can elevate value-selling standards across the enterprise.
Implications
This first-of-its-kind research challenges conventional wisdom around value-selling metrics and provides scientific validation of the importance of artful sales execution, which involves engaging a broader spectrum of stakeholders (both internal and external to the enterprise) and tailoring value propositions to specific customer needs and contexts. Moreover, it underscores value selling as an actionable frontier for harnessing the power of AI. Through monitoring all deals for the adoption of best practices, AI agents such as ViViEN™ can coach sellers to better results across the enterprise.
Conclusion
This research marks a significant step towards understanding the complex dynamics of value selling in the digital age. By integrating AI and fostering a culture of collaboration, organizations can unlock new levels of efficiency and effectiveness in their sales processes.
Future Directions
The results of this study unveil numerous possibilities for future research. These include exploring the differences in optimal value-selling methods across various provider/customer industries, direct versus indirect sales channels, and customer segmentations like SMBs compared to large enterprises.
Learn More
You can elevate your value selling by joining thousands of B2B professionals in the Customer Value Community to network, learn, and benchmark your organization’s value maturity against top SaaS companies like Google, ServiceNow, and HP.
