Friday, October 29, 2010

Buyers Don't Want Solutions

Given the amount of work spent on creating solutions this year, it seems that 2010 will be the “Year of the Solution Sale”.
Except we have two minor problems.
First, technology organizations have been talking about…and building…solutions as a marketing and sales strategy for several decades. In fact, John Patterson, of National Cash Register, may have invented the technique (or at least first published a solution-oriented sales Primer, see right), in the 1880s. So the concept of solution selling is nothing new.
Second, and more importantly, buyers don’t want solutions. They want whatever solves their problem. If a vendor’s particular bundle of products and services (their solution) solves the buyer’s problem, that’s fine. However, most buyers view solutions as “off-the-shelf” bundles of existing products that are convenient or profitable for the vendor to sell, but don’t necessarily solve the buyer’s business problem.
After all, how could a pre-configured bundle solve the unique problems of a given prospective buyer, with his or her unique set of challenges, internal issues, infrastructure, needs, wants, desires, timelines, budget constraints, goals, milestones, targets, partners, constraints and more?
In fact, buyers don’t even use the word “solutions” in their conversations. A few years ago at IDC, we analyzed buyers’ language and the word “solution” never appeared. Buyers just don’t think that way. And as one Fortune 100 CIO told me, when he hears the word solutions, he thinks “McDonalds’ happy meal”…a bundle of burger or chicken nuggets, fries, drink and toy that’s guaranteed to put a smile on every child’s face.
While happy meals may work in fast food, this formulaic approach to addressing buyers’ needs is simply not appropriate for engaging with buyers and addressing their complex problems.
Today, the savvy buyer wants an answer to the following question:
Given what you know about my organization, with our specific set of challenges and opportunities, what should we do?”
Not what should we buy…but what should we do? The buyer wants assistance in co-creating the response to his specific problems. In a recent HBR article, Venkat Ramaswamy and Francis Gouillart state that over the past decade, dozens of companies, including Cisco, Dell, P&G, Sony, Starbucks & Unilever, “have embraced ‘customer co-creation.’” (“Building the Co-Creative Enterprise”, Harvard Business Review, October 2010). Co-creation as a selling process warrants a separate conversation; stay tuned.
Fortunately, for the knowledgeable sales person, most senior buyers are open to learning…to discovering not only what they don’t know, but what they don’t know that they don’t know. They do know that this new awareness can help them avoid significant business challenges or problems, challenges that would otherwise catch them both unaware and unprepared.
So we’ve arrived at the next level of selling. Some call it consultative selling; others refer to it as provocation-based selling, or selling with a Point of View. The sales person must be well-informed about the customer’s individual and industry problems and be willing to take a stand for the customer, whether or not the result is a sale of that sales person’s offerings.

Friday, July 9, 2010

The Late Apex is the Fastest Line to the Sale

In auto racing, the fastest line through a corner is usually a “late apex.” Rather than braking, turning early, and then accelerating after the corner, a late apex takes a straight line deeper into the corner, braking, turning and taking another straight line through the corner and out. It’s typically faster because the car is at speed longer down the straight and faster through and out of the turn.
In sales, the late apex is also the preferred line. Most sales people, as soon as they sniff an opportunity, start “turning into” it (the early apex). They give up on the initial line of discovery – learning about the prospect, their needs, pains, challenges – and turn into it – pitching and presenting. This pitching and presenting takes the salesperson off-track and the sale is lost.
Experienced salespeople will continue on the initial line of discovery until they find the right moment to turn in (the late apex). At this point, they know where they are going with the conversation and it may well be a straight line through the corner and on down the track…or in sales terms, they have found a good match between the prospect’s key issue and their ability to address that issue. At this point they are “co-creating” the solution with the prospect in a linear way.
This way of driving (or selling) feels odd at first. It doesn’t follow the natural contour of the road (or sales conversation). It requires intestinal fortitude to drive deeper into the corner and then turn, or to continue to probe on issues without talking about capabilities or features.
With experience, this different approach becomes more natural. You enter the corner later, you spend less time in the turn, and you accelerate out of the turn more quickly. Similarly, you develop a better understanding of the prospect’s challenges and environment and once you move to develop the solution, it’s a straight line to complete the process…often with the prospect asking “how do we get started?”
Music to every sales person’s ears!

Friday, January 1, 2010

Winning in 2010

While 2009 was a difficult year, 2010 represents tremendous opportunity. Early indicators suggest that the economy is on the mend. While I don't expect budgets and activities to return to 2007 levels, executives have stopped behaving like ostriches and are increasingly considering how to build and improve business operations.We're seeing this in both our own client base and in our daily conversations with hundreds of IT decision makers.

I've called the fourth quarter of 2009 the most important quarter of the decade. Hopefully, you ended the quarter strongly and are well positioned for success in 2010 and beyond. This new quarter will also be critical -- market share is still up for grabs and as you solidify your position within accounts and markets, you will be ensuring future profitability for many years to come.

Weaker competitors are still sitting on the sidelines, wondering what has happened and whether their fortunes will ever change. Agile competitors have already launched new tactics to gain market share in well defined target segments.

To help you move forward strongly, I'll provide some context and the sales productivity framework Tom Barrieau and I developed at IDC. The framework includes the following five major levers of sales productivity:
  • Talent Management
  • Sales Management
  • Sales Methodology
  • Sales Enablement
  • Customer Intelligence
Each of these five levers incorporates a number of elements. In the interest of time, we won't go into those today. Additionally, we're going to leave off the discussion of the heart of the framework itself -- the issue of sales productivity.

Sales productivity is a meaty issue. Most B2B organizations have some definition of sales productivity and in our experience most of those definitions lead to one rathole or another. (Hint -- it's not the number of calls a rep makes or the amount of revenue delivered in a given time period).

For an initial discussion of sales productivity measures, please see the IDC best practices report we published in 2008 on sales metrics and KPIs. This report will help you to start thinking about how you can collect the sales metrics and KPIs that allow you to measure true sales productivity and leverage that knowledge into action that improves your productivity.

That's an important big picture discussion, but not one that will help you to improve your performance next month. You need to balance the important and urgent tasks (See the Covey matrix to the right). If you ignore the important tasks, they will eventually become urgent...and how most sales organizations manage sales productivity is becoming urgent.

Today, however, the urgent tasks are becoming even more urgent. The steps to ensure improved revenue performance over the next two quarters boil down to the following:
  • Sales people must have the right conversations with the right prospects at the right time!
It seems so simple. Yet most larger B2B sales organizations are still working on organizational realignment, tactics to extract more revenue with their existing customers or what to do about a competitive threat. While these are useful discussions, they must not form the basis of your market development strategy.

If you can get past those discussions, here are the steps to take. They map to the three levers listed above in italics:

#1. Target the Right Prospects and Customers at the Right Time (Customer Intelligence)

This is simple. You have useful data in your customer and prospect databases. Ask a couple of your best and brightest business analysts to answer the questions:
  • Which of our prospects said "no" to us six to nine months ago?
  • Which of our prospects has contracts coming up for renewal in the next three months?
  • Which of our competitors is having a tough time in the market?
  • What is the buying profile of our customers? After they've bought something from us, what is the next most likely purchase, and when does that purchase typically happen?
  • What triggers signal buying intent?
  • Which of our prospects is growing fastest?
  • Which of our clients is growing fastest?
Once you've completed this analysis (and you should be conducting it at least quarterly), you'll have a series of lists of sales targets and a good set of "stories" as to when and why a particular target will buy. Work with field marketing to deliver targeted messages. Work with sales operations to parse out the targets on a controlled, measured basis. Monitor the results carefully -- some of these segments will respond better than others, and you will want to shift your marketing and sales resources to the most productive segments.

#2. Deliver the Right Conversations (Sales Enablement)

As part of this initiative, you will need to rearchitect the sales conversations. What are the key "care-abouts" of a given client or prospect? Why should a given prospect buy now? Why should a client upgrade now? (Hint, it's not because you need the revenue!). Deliver these new sales conversations as scripts for territory reps and channel partners. Deliver them as podcasts for enterprise reps and channel partners. Validate those conversations by asking for feedback. Congratulations, you've now just improved your sales enablement capabilities.

#3. Ensure the Right Behaviors (Sales Management)

You've got a secret weapon in your sales organization. This secret weapon can be used to significantly improve sales performance and results, yet in most organizations this resource is spending most of its time filling out reports to deliver to management. Oops.

This secret weapon is your first line sales manager. When the manager spends most of his or her time coaching reps, rep performance soars. In the short term, lighten up on the managers' reporting responsibilities. In the longer term, rearchitect this role so that it is a coaching role rather than a data management role. For a deep discussion of the first line sales manager role and related best practices, take a look at this recent IDC report.

Effective sales management also ensures the application of the appropriate resources to specific pipeline development activities. While few organizations expect their highly paid enterprise reps to be conducting marketing activities, these same reps may be expected to both cold call new opportunities and to manage existing relationships. Savvy organizations disaggregate the sales function, applying specialized resources to specific tasks. (I'll cover this issue in detail in an upcoming newsletter).

Good luck out there. And please, take these issues on with the sense of urgency that they require.