POC vs POV: Framework for Choosing Wisely and Implementing Effectively

Too many buyers have been burned by poor software purchases. With tight budgets and pressure to operate efficiently, every purchase is under more scrutiny than ever - meaning buyers need solid evidence that a software solution will deliver its promised value. 

For sales teams, two ways to demonstrate and validate these nuances and build confidence with buyers are a Proof of Concept (POC) and Proof of Value (POV).

Though these terms are often used interchangeably, they aren’t exactly the same, and using the right one depends on buyer needs, deal stage, stakeholders, and more.

POC vs POV, a Quick Overview

Before we dig into the details and nuances of POCs and POVs, below is a quick run-down:

POCs

Objective: Validate the technical feasibility of a product or solution

Focus: Technical functionalities and capabilities

Stage: Typically used mid-funnel

Typically Used When: The product is highly-technical or new, functionality within a buyers environment or process needs to be verified, specific features and capabilities need to be validated

POVs 

Objective: Demonstrate the business value of a product or solution

Focus: ROI, business outcomes, business KPIs

Stage: Typically after technical validation is completed, but can be used throughout the sales cycle

Typically Used When: Proving quantifiable benefits like efficiency gains and cost savings, demonstrating superiority over a buyer's current solution or differentiation from competitors

What is a Proof of Concept (POC)?

Broadly, a Proof of Concept is an exercise that tests the feasibility of a specific concept or idea in an effort to determine its practicality and potential. For B2B SaaS specifically, POCs allow potential buyers to test a software solution within a controlled environment and answer questions like: 

• Can the software integrate with our existing systems and workflows?
• Does the software perform the tasks it claims, and does it address our specific challenges?
• Is the product technically capable of solving our problem?
• Does the product meet our needs and expectations, and work with our way of operating?
• Can it integrate with our tech stack, processes, and function in our environment?

By proving a solution’s technical functionality and benefits upfront, POCs help minimize the perceived risks of expensive software purchases, and buyers can feel more assured about the product and confident about moving forward with a purchase. 

Benefits of POCs: 

• Goes beyond demos, enabling buyers to test-drive the solution and reach the “aha” moment where the value of your product becomes clear.
• Validates the product’s technical capabilities and ensures the solutions meets the specific capability and functionality needs of the buyer.
• Identifies and addresses potential challenges early in the process, and reduces the risk of issues during later implementation stages.
• Builds confidence and trust in the product, accelerating the deal and purchase journey.

Challenges of POCs: 

• POCs can be resource-intensive, especially for custom-built POCs.
• Without using automation or pre-filled POC instances, POCs can be inefficient and difficult to scale.
• POCs focus on specific product functionalities, so may not fully address broader business considerations or long-term viability.

Learn how TestBox solves challenges teams face with POCs by enabling them to efficiently create impactful POCs, at scale.

What is a Proof of Value (POV)?

For B2B SaaS, POVs are about demonstrating the business value and outcomes of a product or solution. The key goal is to validate that the product will help an organization achieve specific and measurable business objectives it has. POVs are typically used to address business-related questions like:

• Does the solution provide significant business value?
• How will it help solve our specific business problems?
• What measurable impact will it have on our KPIs?
• What is the expected ROI?
• How does the solution compare to alternatives?

POVs are particularly valuable later in the sales cycle, where decision-makers require concrete evidence of the solution’s business value before committing to a purchase.

POVs often involve running a pilot within a select department or group, using real-world scenarios and data to demonstrate the solution’s impact.

Benefits of POVs: 

• Shows how the product can realistically deliver measurable ROI and outcomes on business KPIs.
• Helps get buy-in from the decision-maker in an organization.
• Highlights unique competitive advantages and value props a solution has over others in the market

Challenges of POVs: 

• POVs require careful planning and alignment with buyers' specific business goals, along with requiring significant time, budget, and personnel resources.
• If not carried out properly, ineffective POVs may fail to demonstrate the full value of a solution and lose buy-in from stakeholders.

POCs vs POVs, When to Use Which?

POCs are best used in the early to middle stages of a sales cycle, and when there are needs like: 

• Proving Technical Feasibility: When you need to determine if a new technology can be successfully implemented within your existing infrastructure.
• Lowering Perceived Risk: When there are significant technical risks involved that need to be addressed before full-scale implementation.
• Showing In-Development Functionalities: When you want to showcase new product features or functionalities that haven't been released. 

POVs, though, are typically used in later stages of deals, especially those that are complex and involve higher-priced solutions with longer sales cycles, or when there are needs like:

• Demonstrating Business Value: When you need to demonstrate the potential business impact and value of a solution to stakeholders.
• Justifying Investment: When seeking approval for investment or budget allocation based on the projected ROI.
• Differentiating From Competitors: When you need to showcase how your solution stands out from competitors in terms of tangible value and benefits.
• Getting Buy-In From Decision-Makers: When you need to gain buy-in from decision-makers by proving the solution's worth in real-world scenarios.

POCs can be a powerful takeaway for buyers who’ve already seen a demo and are now looking to get “hands on” with a product and test it for themselves. They can also be a great way to demonstrate additional features to help with deal expansion, along with capabilities that are still in development. For qualifying buyers, POCs can be used when a buyer is generally bought into the concept and need for a solution, but is looking to further validate a purchase.

Lastly, POCs are a great way to validate newer, innovate, highly-technical solutions that would naturally lend to higher perceived risk and uncertainty.

Learn how Dixa leveraged TestBox to let buyers see their ground-breaking product in action, instead of asking them to imagine it.

Example POC Scenario

Let's say that Company A is considering a new software application that uses AI to make supply chain operations more efficient. Before committing to a purchase, the company conducts a POC to test the software’s algorithms in a controlled environment. 

In this scenario, Company A is provisioned a POC instance that is pre-configured with highly realistic mock data that closely mirrors what their own.

This allows the company to experience the software’s capabilities without the time and effort required to integrate it with their existing systems.

And the POC demonstrates how well the AI can predict demand and optimize inventory levels, providing valuable insights into the technical feasibility of the solution.

Example POV Scenario

Company B, a global enterprise, is evaluating a new CRM system to improve its customer service processes. The sales team proposes a POV where the CRM is deployed in the customer support department for a three-month trial.

During this period, key metrics such as response time, customer satisfaction scores, and support ticket resolution rates are tracked.

The results demonstrate a significant improvement in customer service efficiency, justifying the investment and leading to a company-wide rollout of the CRM system.

Integrating POCs and POVs in the Sales Process

For complex B2B sales cycles, particularly in large enterprise deals, integrating both POCs and POVs can create a powerful validation framework that moves prospects through the sales funnel with confidence.

1. Start with a POC: Begin with a POC to validate technical feasibility. This helps address any initial concerns and builds a foundation of trust.
2. Transition to a POV: If a POC is successful, but your champion needs additional support to sell the solution to executives internally, use a POV to demonstrate the business value. Leverage the insights gained from the POC to strengthen the POV.
3. Iterate and Improve: Treat the POC and POV as part of an iterative process, where feedback from each phase informs the next steps.
4. Engage Stakeholders Throughout: Maintain open lines of communication with all stakeholders to ensure their needs are met and build their confidence in the solution.

For a brand that wants to buy and implement a complex SaaS solution, the process can be complicated, involve multiple stakeholders, and require thorough validation. Let's imagine Company C, a mid-sized manufacturing firm, is in-market for a new Enterprise Resource Planning (ERP) solution to streamline manufacturing and business operations.

Company C and the ERP vendor can benefit from both a POC and POV. Company C can make sure they're making the right decisions based on technical needs and business goals, and the vendor can make sure the technical capabilities are proven, and business value of the solution is clearly demonstrated.

Phase 1: the POC

They start with a POC to validate that the ERP solution can meet their technical needs and use cases. The POC involves:

1. Product Testing: Exploring and evaluating key functionality in a controlled testing environment. 
2. User Interface Evaluation: Assessing the ease of use and functionality of the ERP system's user interface to ensure relatively easy mastery for relevant users.
3. Integration Testing: Showcase key integrations to ensure seamless data transfer between the ERP system and existing databases.

Potential Outcomes from the POC:

• The POC enables technical teams to validate the feasibility of incorporating the ERP solution into their existing tech stack and infrastructure. This validation process helps identify any integration challenges and ensures that the new system can function seamlessly within the current environment.
• The POC provides valuable insights into where change management will be necessary by highlighting how existing workflows may need to adapt to the new system.
• For end users, the POC offers a hands-on experience, allowing them to get a feel for what using the product will be like.

This early exposure is critical for soliciting feedback and addressing any objections or concerns during the validation process, ultimately leading to a smoother implementation and higher user adoption rates.

Phase 2: the POV

Following the successful POC, Company C moves forward to a POV to demonstrate the ERP solution's business value. This phase involves:

1. Pilot Implementation: Deploying the ERP system in one department (e.g., finance) to test its operational impact.
2. Performance Metrics: Measuring key performance indicators, such as processing time, for financial transactions, error rates, and user satisfaction.
3. Cost-Benefit Analysis: Analyzing the cost savings and efficiency gains from using the ERP system.
4. Stakeholder Feedback: Gathering feedback from users and department managers to assess the overall value of the system.

Potential Outcomes from the POV:

• The POV could demonstrate that the ERP system reduces financial transaction processing time by 30%, leading to significant time savings and efficiency improvements.
• It might also show a 25% reduction in error rates, enhancing the accuracy of financial data.
• A thorough cost-benefit analysis could project an ROI of 20% within the first year.

Providing the concrete evidence decision-makers need to confidently move forward with a full-scale implementation.

Best Practices for POCs and POVs

When it comes to putting a POC to its best use, there are a few steps that stakeholders should take. And when using a POV to illustrate the business value of a new software product, there is another set of best practices to keep in mind.

POC Best Practices:

1. Define Clear Objectives: Clearly outline the goals and objectives of the POC to ensure that all stakeholders are aligned and understand what is being tested.

2. Limit Scope: Keep the POC focused and manageable by limiting its scope to the most critical technical aspects that need validation.

3. Allocate Resources Wisely:  Ensure that the necessary personnel, tools, and budget are available to execute the POC effectively - and explore ways to deliver automated POCs that don’t require as much technical support. 

4. Engage the Right Team: Assemble a cross-functional team with the necessary technical expertise to conduct the POC effectively.

5. Set Success Criteria: Establish specific criteria for success that will help determine whether the POC has achieved its objectives.

6. Manage Expectations: Set realistic expectations for what the POC will achieve and communicate these to all stakeholders.

7. Document and Share Findings: Thoroughly document the results and findings of the POC, including any technical challenges encountered and how they were addressed.

8. Iterate and Improve: Use the findings from the POC to make iterative improvements to the concept or solution.

POV Best Practices:

1. Engage Stakeholders: Involve key stakeholders from the beginning to ensure their expectations and requirements are understood and addressed.

2. Focus on Quantifiable Value Metrics: Identify and measure the key quantitative value metrics that will demonstrate the solution's impact on the business, such as ROI, cost savings, or performance improvements.

3. Create Realistic Scenarios: Use real-world scenarios and data during the POV to provide a realistic assessment of the solution's performance and value.

4. Customize Scenarios: Tailor the POV to reflect the specific needs and challenges of the organization.

5. Clearly Communicate Benefits: Clearly communicate the benefits and value of the solution to stakeholders through detailed reports and presentations.

6. Gather Feedback: Collect feedback from users and stakeholders during the POV to identify any areas for improvement and ensure that the solution meets their needs.

Proof: An Essential Ingredient for Sales Success

Successful validation through a Proof of Concept (POC) and Proof of Value (POV) depends on careful planning and execution, choosing the right one for the right stage of the deal and buyer needs, and having the necessary resources. Whether using a POC or POV, success will help improve buyer confidence, build trust, lower perceived risk, and drive the deal forward.

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