****Please forgive any and all transcription errors as this was transcribed by Otter.ai.****

Ian Campbell 0:00

Hi, I'm Ian Campbell and you're listening to A Shark's Perspective.

(Music - shark theme)

Kenneth Kinney 0:19

Welcome back and thank you for joining A Shark's Perspective.

Kenneth Kinney 0:22

I am Kenneth Kinney, but friends call me Shark. I am a keynote speaker, a strategist, a shark diver, host of this show and your Chief Shark Officer.

Kenneth Kinney 0:30

I meant to get this episode out earlier, but now's the right time to get that value.

Kenneth Kinney 0:34

You're struggling to make sales, and you know it. When meeting with prospects, you routinely challenge them to move to the next step in the sales process, but they're still not moving with you or buying you're good at showing them your products features, but that's not helping to close deals. Maybe the secret sauce, if you will, is putting value into the entire sales process, some simple changes in the way you speak. They bring you more leads, more sales and happier customers. The question is, are you making a value sale?

Kenneth Kinney 1:01

Glad to finally welcome Ian Campbell, the CEO of Nucleus Research, a recognized expert on ROI and TCO analysis of technology, and the author of "The Value Sale: How to Prove ROI and Win More Deals".

Kenneth Kinney 1:13

And on this episode, we will discuss pushing customers versus providing value, total cost of ownership, reshaping the sales funnel. The discussion of value, the over complexity of ROI, payback, metrics, diving in Florida, curiosity, flying alligators and bathtubs, lecturing in college and a lot, lot more.

Kenneth Kinney 1:31

So let's tune into a value author with a value shark on this episode of A Shark's Perspective.

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Kenneth Kinney 1:42

Ian Campbell, welcome to A Shark's Perspective. If you would tell us a little bit about your background and your career to date.

Ian Campbell 1:48

Hey Kenneth, thank you. Thanks for inviting me on. So I've been in the tech industry for a long time, since it feels like the beginning of time, and I've been running nucleus research now for over 20 years. Nucleus is a company that looks at value. So we're like any other management consulting research firm. We look at the tech industry, but we really focus on, does something deliver value or not? And our perspective is really what I like to say is we hate everything equally. So we don't like or dislike anything. We just look at everything with a Skeptic's mind and say, Was it worth it or not for somebody to do it? I teach at I used to teach at Babson College, but it's since moved to Miami, so now I've been doing a class at Florida International University, just there last night, and have do a bunch of the hobbies here, scuba diver, I know you are as well. Fly airplanes around South Florida, which tends to be a fun activity for me, but value is the core part of what we do, and it's been a core focus of mine for now 20 plus years.

Kenneth Kinney 2:51

Well, let's dive in and talk about the book. The concept of this book, or at least the timing of it, probably better said is, is great. It's like perfect timing. We're in an economy, obviously, where people are having to justify purchases more than they used to do, whether it's at the consumer level or it's B to B, and a lot of companies don't explain the value well enough at all, and that simply, obviously makes sales a little more challenging. But let's talk about your new book, The value sale, how to prove ROI and win more deals. Talk a little bit at a high level about the book and why you chose to share this idea.

Ian Campbell 3:24

Well, just exactly what you pointed out, which is, I think, you know, in the last decade, if you will, sales have really focused on, how do I push the customer to the next stage in a funnel? And I think we're reaching a point where we really need to guide the customer through that value discussion. The example I really start out with in the book is my alligator example. If I told you that you could make money raising baby alligators in your bathtub, would you do it? Of course, the right answer is, how much money am I going to make? Right? And there is a number above which you're in and there's a number probably higher than that, above which your spouse says you're a genius. And even if this is the only place that you can raise baby alligators, your only bathroom and that they have to go down the street to the gym and use their shower for the next year, they're still okay. There's a number above which they're still okay with it. Now the point here is.....

Kenneth Kinney 4:16

Well, let me stop you here, because you didn't talk as much about the gym as having to the example used was having to go down the street to the gas station bathroom.

Ian Campbell 4:24

Right. Yeah, even if you have to use the gas station bathroom, you're still going to do it above a certain number. And the point isn't that you should be raising baby alligators in your bathtub. The point is that I didn't tell you anything about the product. I didn't push you to buy the product. The only thing I did was frame for you the value of raising baby alligators. And you drove yourself. You drove yourself through the funnel. You said, Hey, and can I have a batch of baby alligators? And by the way, can I have a second batch, because my uncle wants to do it, maybe a third batch, because my brother's feeling like you are going to buy as many batches of baby alligators for me as possible, if I show you that. That you're making money by doing that. And really what we're taking is that sales funnel that I used to push people through and say, if I just show value, they're going to drag themselves through. All I need to do is lay out those steps and say, here's what it's going to cost. Here are the areas of benefits, and here's the positive ROI you're going to get and you're bought in, you're going to go forward, I know what to say. Look, look at all the things we do. There's no shiny object syndrome. If you want to target all the features. Of course I do, but if I start with value, it makes the rest of the discussion so much easier. So we're going from sort of, you know, that old style of pushing the customer to the next stage, to this new this new age where I need to be able to show value. And another important point of that is, the more I show value, the easy, easier it is for your prospect to then turn around and ask for money. Because nobody's I'm not selling to a decision maker. I'm selling to someone who asked to get money from someone. And what's that? What's that discussion sound like it's usually, why am I doing this again? Oh, we're going to save 20% of our electric electricity cost. Absolutely, that's fine. I'll do that. It's not it does something. I don't want to know the list of features. I want to know how much it's saving me or how much more productive my folks are going to be.

Kenneth Kinney 6:10

I'm really finding a lot of the discussions right now in conversations I have with people well, I find it very welcoming when they challenge me a little bit to talk about the value. Because what I'm starting to see this is, with a lot of companies right now, is how often people talk about the dollars being more real to them than they were before. And used to be that people would spend like a drunken sailor, and everything was bought off of motion, and there wasn't a lot of justification. And now it's things have changed. But I'm curious, since you work for a research group, what type of research you relied upon to write the book? Because this went beyond just your beliefs and emotions.

Ian Campbell 6:47

Yeah, absolutely. So we've been working with salespeople for a very long time in talking about value, and I just got off a call today with the sales team on understanding a value message around their product. So we've been doing it for 20 years, and in doing that, we've gathered a lot of data from what wins and what doesn't win in a deal. For example, one of the topics that a lot of people talk about is TCO. Hey, we should talk about total cost of ownership. Turns out that's a terrible idea, because when people talk about introduced TCO, they talk about cost. When they talk about cost, the natural way to increase my TCO is to ask for a bigger discount. So almost every single time that somebody brings up TCO in a discussion, they then talk about discounting. Discounting becomes an issue in the discussion. If you talk about value first, you don't get into that discounting discussion. So we've taken all of that and started to bring all that feedback after working with people and then looking back at what the results were after two decades now, of doing it, we're able to come up with what we think of some of the best practices. And all of that really crystallized down to the value sale in the book. So it was all that research over all those years, and training all those salespeople that really led to the book coming out.

Kenneth Kinney 7:56

Well, a typical sales funnel generally doesn't call out value, is the way you propose it. I mean, I think when most people even think of any sort of sales funnel, they'll probably start out it's even some awareness to action typical funnel. Talk about what, how you're proposing, reshaping that funnel, if you will, with adding value to those concepts.

Ian Campbell 8:17

And Kenneth, great question. So if you look at the typical sales funnel today, and we all know that funnel, it has some basic stages. Bring a lead in, qualify to lead, align the proposition, deliver a proposal, close the deal on various stages around that in some way, depending on my company and value used to we see a lot of people will put value in as a point in that funnel. Oh, when you get to the bottom, talk about a business case, or, you know, talk about the beginning. And usually what happens is salespeople become afraid to talk about it. Yeah, it's numbers. I don't know. We've already got the customer at the end. Let's see if we can close it without talking about ROI. So we see a lot of salespeople who are afraid to insert it into the funnel. And what you really should do is think about the funnel is having two sides. There's one side that you already know that those stages that you've been using every day. The other side of the funnel is the value side. And the value side has three stages. The first stage at the very top is, how do you deliver value? So you bring your customer, and you qualify lead. You talk about all the different ways you deliver value. The second stage is you start to align that proposition. You start to talk to the customer out the different things that you can do for that particular customer. That's where you bring in other companies like them that have achieved value. So stage one, how do I deliver value? Stage two, have other people like you achieve value? Stage Three, how will they achieve value. Really write down that business case. So think about the funnel 72 sides. I go to stage one, I go to stage one in the value side, I go to stage two. Go to stage two in the value side, I go to the close I show the value. And as long as you want back and forth between those two sides, you're very likely to drive that customer through the funnel. Help. Help pull that customer through the funnel. Model where they can see the reason why they should buy the value to buy. So big picture how other people achieve value, how they will achieve value. Don't get to the end and throw a business case out there. You haven't set it up yet. You're throwing in a business case. You're throwing out terms that they don't know. Use those terms early on. So start talking about value, and it's relatively easy to do if you use value at the beginning of the discussion, not at the end.

Kenneth Kinney 10:24

Why do you think they don't look at that way? And I know we sort of preach and teach a lot of this with talking about how buyers rely on emotion heavily, but when you clarify what the needs are of the buyer versus the conversation the seller thinks they should have, those too often don't align. I am much more to the belief that the customers are thinking value first, even if they do buy on emotion. But to your point, earlier, the salesperson doesn't necessarily want to bring that up in the discussion, which you would find hard to believe. I guess in that.

Ian Campbell 10:53

I think there are a couple, a couple of reasons why I think you've got a lot of companies now that have value teams. And while I like the idea of a value team. Value is a discussion. You don't need an expert to come in to build a business case. If you do more times than not, you're making a mistake. You're making more out of this than you should. Yes, there will be situations where you need to build an in depth business case and bring an outside team, but we've turned ROI into this sort of magic thing that takes a lot of effort, and it really isn't. It's a lot easier than we make it out to be, but people become afraid, afraid of it. Also. We do a lot of sales training, but when we do sales training, rarely do they do ROI training. It's almost always product training. Let me tell you all the features it does, but they don't do How does it deliver value for the company? Here's an interesting thing. I can only do three things for a customer. I can either increase productivity, reduce cost, or as a byproduct of those two, I can increase profit. That's it. That's all I can do. So everything you sell just does those three things. So we talk about features, but we never say, hey, we generated this. We created this new human interface because we wanted to increase the productivity for our salespeople, or we're now doing this as a SaaS delivery model, because we want to reduce the cost of it. So we never link the feature to the actual benefit. And even when you see those featured benefits things, it's usually a feature and a restated feature. It's never really a benefit. The benefits are only those three. So because we make it into more than it needs to be, people think, well, ROI is this difficult thing. You already know ROI. If you've walked into any bank and put money into a CD, you will understand the ROI equation. Put money in, get 10% back. I know it's a 10% ROI. I know what that calculation is. It's not that hard. We try to make it into more than is. So salespeople can often be afraid that this is going to be a process, when really it's just a discussion. And for most of the sale, it's just a discussion around let's talk about the benefits you're going to get. Let's think about what the magnitude of those benefits will be. It can be a real casual conversation, but we make it into more than it needs to be.

Kenneth Kinney 12:58

Well, to the concept of the three things you were talking about. Lean back on the example, especially in the B to B space, with martech, the IT people view the value a different way. The marketing people value it a different way. Your finance people value it a different way. But they all share the same concept of wanting to understand the value of it and the ROI of it, and that's why I liked a lot of what you were talking about in the book, because it's again, such an important way to reshift some of the conversation. But let's talk about prepping for the meeting, because I like this chapter later on and the questions for the elevator ride, how should a salesperson think through the preparation of explaining value, excuse me, in their quick sales pitch.

Ian Campbell 13:44

Yeah, so. ROI when you walk into any deal, think about two things. Think about breath and repeatability. How many people will I touch and how often will I touch them? The more people I touch, the more often I touch them, the greater the potential. ROI, now, you know, I'm using touch in the form of technology, but let's say I'm selling a combine, right? I'm farming corn or something, so I'm only going to touch one. Farmers one carbine. So how do I increase repeatability? Well, maybe that person is going to use it more times, or breath, maybe a broader field. So everything has breath repeated repeatability, the more often I use something, right, and the more people that use it, or the more broadly it's used, the greater the potential ROI. So when I walk into any deal, just quickly go, does this deal have a high breath and repeatability? If it does, the ROI is likely going to be very easy for you. If it doesn't, the ROI is going to be difficult. And it's not the product, it's the deal. So if we think about a CRM system, I walk into a customer that has 1000 salespeople, high breath, they'll use it every day, high repeatability. If I walk into a customer that's one salesperson, same product, different potential outcome, because they don't have as many people using the product, and you sort of intuitively know it. But think about how can I. Increased breath? Could I get more people to use my product in this company? Could I point out how managers can use it, or how sales support can use it? Even though there's only one salespeople, there might be four or five other people that could get advantage out of it. So as I'm prepping for the deal, think about, let's increase breath and repeatability as much as we can, and that will increase my ROI if I think I'm going to have trouble with that. If it's not going to work out, it may not work out in which case you were all your only choice may be to discount more to try to make the value message better, but at least you're prepared for that. As you walk in and know which way to go,

Kenneth Kinney 15:33

You talk a lot about the financial metrics and some pitfalls, I guess, is said that way to avoid in your presentation. I started thinking as I was reading through that really even how your procurement team may look at this in the sales process, the committee that maybe is evaluating an ERP system, for example, versus the way procurement justifies it for CFO could be completely different. So how do you build in that value with the right kind of financial metrics to make that group happy? And I don't know if you could tell, but I've had I've had to do this multiple times, sure, two corporate teams I've worked with, so it's why I love this. It's a juicy topic, and trying to please everybody in the process anymore.

Ian Campbell 16:12

It is. And you know, one of the challenges with finances, everybody thinks they're right and very sure them. You know, it's a lot of people really aren't, but don't want to be told that, yeah, look what I like to say is, the most important thing you can use for anything is payback. Payback period is, how long till I cover my cost? Now we're talking about benefits. We can talk about benefits in a few minutes, but if we talk about the benefits, we get the customer to understand what their payback period is. How long do they cover the cost. Everybody can feel that. So if I told you that, hey, this new product will cover its cost in four months, I know what that feels like. If I say this new product has a 300% ROI sort of intellectually, Noah, but I don't know if I say the internal rate of return is 320% Well, now I'm really confused. I don't know what the heck that means. So the way to simplify everything is always lead with payback, no matter who you're talking to, and then think about that person, the finance person is going to want to know. Roi, now there are metrics that are terrible. NPV, IRR, a lot of metrics out there here, but there are two metrics that have been around since the beginning of time. How long till I cover my cost? And what's the return of my investment? Is it worth it to go outside? And it's my example in the book. You know, I want to I'm a cave person. I want to go out and hunt. Is it worth it or not? How cold is it? What am I? What's my likelihood I'm going to get eaten by something that's a return on investment? How hungry am I? What's my likelihood I'm not going to make it back? That's an ROI question, and cave phishman knew that in the beginning that was written on cave walls. So those two metrics have never changed. Everything else is new, so ignore all the new stuff, because it doesn't mean anything. But those two states have stood the test of time. So whenever you're talking to someone, you can cut through all of the different ways to approach it by saying, Look, covering costs in X amount of months or a year and a half, whatever it's going to be, and the average annual return on investment is whatever it is. And if you focus on those two items, you're likely to get everybody to agree, no matter how they look at it. Sure, some people want NPV, somebody want different metrics. And in the book, we talk about all those metrics and how to approach those and you know, there's some ways to gain a lot of that, which is why I don't like those metrics. But if you've got to do it, do it. You use those metrics, but ROI and payback. Payback always first you'll be able to cut through ID decision makers hesitation.

Kenneth Kinney 18:29

So I particularly enjoyed chapter 11, when she kind of explained at a high level, how does marketing deliver value?

Ian Campbell 18:36

Yeah, one of the one of the best ways, is to understand the benefits that you deliver really in a we talk about the different types of benefits, and I talk about benefits as being sort of first, second, third and fourth order benefits, but the more marketing can address those benefits and say, here's a feature and here's our drives to a benefit, tying everything you talk about what you do to how it increases productivity, reduces cost, increases profitability. The more you do that, the more you make it easier for the salesperson to start with. Hey, you know what this new product is going to help you reduce your cost. And let me show you all the different ways the marketing marketing material talks to that. So the more marketing can support that message, the better off you're going to be, but understanding what benefits are good and what benefits are bad sort of a key to how do I create a good marketing message or not? Some things are just marketing. And you know, they seem like benefits, but they're actually meaningless when it comes to the business case. So understanding whether something's a good benefit or not is really important for marketing.

Kenneth Kinney 19:38

Well, Ian, I ask everybody that appears on this show. And since you live in the Miami area and you're a diver, what is your favorite kind of shark, and why have you encountered many in your diving exploits?

Ian Campbell 19:48

Yeah, over the years, I've been diving for a long time. So you know, you have some sharks, as you know, kind of some some that are curious, and some that are that are distant. And I watch the. Various ones. More carefully, I've had more than a few incidents, but you know, for me, it's the it's the standard reef shark that you see in the Caribbean when I'm on a wall dive, and there's just one of those sharks out just just outside of your your eyesight. It's sort of nice to watch them as they go along a reef, either below you or slightly above you, and get a little bit curious, but not too curious.

Kenneth Kinney 20:24

I love Caribbean Reef Sharks, but yeah, to your point about curiosity, a good bull shark or a tiger shark is extremely curious, and you really have to watch out for them because of their curiosity. And they have some powerful bites. If you don't watch out for that curiosity.

Ian Campbell 20:37

I'd rather they not decide they didn't want to eat you after they've taken chunk. You know?

Kenneth Kinney 20:43

Yeah, I'm happy to tell anybody I don't taste good before they take a bite. So that's right. Well, Ian, it's a special time in the show. Are you ready for the five most interesting and important questions that you're going to be asked today? I'm ready. All right, so you moved from Boston down to Miami. Sports teams in Boston or the sports teams in Miami?

Ian Campbell 21:03

Boston, Boston. I gotta stick with Boston. I still have that accent. I say Boston. It's with the Boston accent. So still a Red Sox fan, patriots, I'll give you but, but, yeah, I can't not be Red Sox fan.

Kenneth Kinney 21:15

all right. Number two, what do you enjoy more? Being a pilot or being a diver?

Ian Campbell 21:20

Pilot. I've been doing that for a very long time, and I've been flying for for a long time. You can't beat the that late night turning on to final seeing all the lights in a runway. It's just sort of magical.

Kenneth Kinney 21:34

Number three, alligators or crocodiles?

Ian Campbell 21:38

Boy, you know, it's hard sometimes to tell the difference. Crocodiles have the pointy noses and Alligators have the round noses. So I do know that, but I think I'm more of an alligator fan.

Kenneth Kinney 21:48

Yeah, I mean, if you're in Florida, you got to kind of be a Gator fan to at least appreciate it. But crocodiles are bigger and not native to our part of the world, but they show up way too much now in Florida, and especially in Everglades, people dumping them out. It's crazy that and boa constrictors now too. Number four, being a CEO or being a lecturer at a college?

Ian Campbell 22:10

a lecture to college, you know, I like being a CEO, but there are parts of that job that's, that's, you know, administrative, and being a lecturer to college, you you know, you're in the front of class, and you get to see the light bulbs go off and change the direction, or give people new ideas. I absolutely love doing that, and we'll do that forever. Yeah.

Kenneth Kinney 22:31

Worst thing is you give somebody a bad grade, you never have to fire somebody for underperforming in a class, you know. So there's, there's a lot more fun being lecture.

Ian Campbell 22:40

Even with a bad grade. They know it, and you've helped them to get better, no matter what it is. So any grade is a good grade, if someone's moved forward by a step. And what I say is, you know, I just need 1% if I can get somebody forward 1% each day, then in 100 days, I've won, and that's all I need to do. And, yeah, company, on the other hand, there's always, you never get good mail when you're a CEO.

Kenneth Kinney 22:58

Alright, number five. And the most important question that you're going to be asked today is, biscuits or cornbread?

Ian Campbell 23:05

Cornbread.

Kenneth Kinney 23:07

Easy answer.

Ian Campbell 23:07

Yeah, I would say biscuits, being a New England kind of guy, but now that I'm in the south, it's cornbread all the way.

Kenneth Kinney 23:13

Alright, so Ian, where can people find out more about you, get a copy of the book, find out about nucleus research, and more?

Ian Campbell 23:19

So nucleus research come to nucleus research. We have lots of research on the tech industry, but the value sale is where you can find information on the book and a lot of background on these metrics. We've talked about, what are good benefits? What are bad benefits? How do I approach it? How can I cheat with IRR in a way? So there's a lot of great articles up there that you can use the value sales on Amazon. Please take a look. Give me a review if you like it. But at any time, you can always reach out to me at Ian at nucleus research. I always try to answer questions from folks some emails, so I will absolutely I love doing that more than I love most of the job day to day. So please feel free to reach out.

Kenneth Kinney 23:57

Well, Ian, thank you very much for being with us today on A Shark's Perspective.

Ian Campbell 24:01

Kenneth, thank you very much. Really appreciate you having me on.

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Kenneth Kinney 24:11

So there was my conversation with Ian Campbell, the CEO of nucleus research, a recognized expert on ROI and TCO analysis of technology, and the author of "The Value Sale: How to Prove ROI and Win More Deals". Let's take a look at three key takeaways from our conversation with him.

Kenneth Kinney 24:27

First, typical sales funnels don't call out value, but if we reshape it, then we can think about the funnel having two sides. One side has the normal stage as we know, the other has how we provide value and that aligns to what they want, and not just how we push them through a process. After all, isn't it about helping customers get what they want?

Kenneth Kinney 24:44

Second, value is a discussion and not just a business case. Whatever way you look at ROI, consider it as a different part of your metrics. Don't make it more than it needs to be, just figure out a somewhat different equation.

Kenneth Kinney 24:56

Third, remember that every group that you're selling to within. In a company perceives value in a different way, marketing versus finance versus procurement versus it and etc. Each has a different lens that they look at value through. Whenever you're selling something to them, You are so often trying to make not just a customer happy, but a committee of customers internally that are happy. Ann says, explain the payback with two basic metrics that have stood the test of time. One, cover your costs in X amount of time. And two, what is the average ROI?

Kenneth Kinney 25:25

Got a question? Send me an email to shark at Kenneth Kinney dot com.

Kenneth Kinney 25:29

Thank you again for the privilege of your time and I'm so thankful to everyone who listens.

Kenneth Kinney 25:33

I'm always working on providing value to you. So join us on the next Episode of A Shark's Perspective.

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