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Winning Versus Losing
For all intensive purposes, selling is binary - with no consolation prizes. In almost all cases, there is one winner and multiple losers. When companies aren't winning enough, the finger of blame quickly points in one direction - the sales force. In general, most companies sincerely believe that their offerings have real value. The problem is, the appreciation of that value isn't making its way to the potential customer often enough. The common assumption: there is a breakdown between the value of the company's offerings and the prospective buyer - and that breakdown is typically perceived to be at the point of sale.
Clearly there can be skills and process gaps in the sales organization that are limiting revenue growth. In fact, when competitive pressures are really impacting the business, three common reactions to revenue and margin erosion have often occurred:
1. We must "fix (i.e., train) the sales force."
2. We need to offer "solutions" versus products (or services).
3. A combination of 1 and 2.
While these reactions to the problem are potentially helpful, in many situations the tendency to focus exclusively on "fixing the sales force" ignores other key factors in the win-loss equation.
So what does research really tell us about win-loss scenarios? Extensive win-loss studies conducted by Primary Intelligence (www.primary-intel.com) have yielded some interesting results. After analyzing thousands of win-loss studies in the technology industry, some key trends have revealed themselves. In essence, three key factors consistently emerged from the data that have a significant impact on winning versus losing, as follows:
That is, the proficiency of the sales team has a clear impact on winning, but other systemic factors are just as important. As Rob Jepson of Primary Intelligence says, "When sales are off, many companies basically guess wrong and assume that it's just a sales force issue." In fact, multiple millions of selling professionals have received formal training in some form of solution, value, or customer oriented sales curriculum. While this training can be essential and help sales people to better position value with customers, industry studies suggest that efforts to improve "sales people" may have hit the wall. To understand why "fix the sales force" initiatives are often not delivering the expected results, it's important to understand a significant environmental shift that has occurred in the past several years.
From Demand Rich to Demand Poor
Before assuming that your revenue problem is primarily a sales organization issue, it's important to understand how the overall "selling" environment has evolved in the past 5-6 years. For the better part of two decades prior to the year 2000, many industries were operating in a "demand rich" environment. For example, the adoption of Enterprise Resource Planning by thousands of companies created a demand rich environment for ERP technology. Correspondingly, sales organizations were focused on effectively managing the pipeline of opportunities that were being generated during periods of widespread adoption. In this environment, we saw the birth of "opportunity (funnel) management" and "strategic account management" methodologies. That is, most of the sales management and methodology focus was "in the funnel" (lower half illustration).
By contrast, in the post 2000 economic environment, we have witnessed the end of "momentum" buying in many industries and a general economic slowdown. This demand-poor backdrop tends to amplify many of the "above the funnel" factors (upper half of illustration). These factors were less critical in a demand-rich setting, where buying decisions were less stringent. To effectively sell real solutions in today's demand-poor environment, it is essential to diligently address the following "upstream" questions:
These are difficult and sometimes painful questions to confront, but have as much (or more) impact on sales effectiveness as actual selling skills and knowledge. That is, the answers to these questions directly influence two of the three key win factors:
From Products to Solutions - A Possible Answer?
So how are companies striving to be perceived? In the effort to grow revenues, fend off commoditization, and improve win rates, no trend has been more prevalent in recent years than the efforts of many companies to be perceived as providers of "solutions," versus makers of products. The January 17, 2005 USA Today vividly illustrated this trend by citing initiatives by Intel, HP, Motorola, and AOL that will focus on new market approaches that are "solution-focused." In fact, practically everywhere you turn the new mandate to position and "sell" solutions is top-of-mind in research and sales-related publications. Some recent examples include:
Increasing globalization and imitation-inspired competition have compressed the differentiation window for many products and services. As these market pressures increase the commodity perception of many offerings, the solutions trend has woven its way into a number of familiar corporate "conversations," including:
While being perceived as a "trusted advisor" or a consultative partner is highly desirable for many companies, the attempt at making the actual transformation is often transparent, fragmented, or short-lived. Like many other top-line improvement initiatives, most efforts to become solution-centric are focused almost exclusively on one part of the organization - the sales force. The result is often a "disjointed" sales ecosystem as illustrated below.
That is, while striving to "sell" solutions, many organizations have retained a product-centric legacy in other key areas of the "revenue engine." What is the relationship between this scenario and winning versus losing? Often, two of the major win-loss factors are out of sync with the sales approach of the company. As a result, key perceptions of the company and its offerings don't "add up" in a competitive situation. So a well executed sales campaign may not overcome other key aspects of the overall decision criteria. In addition, improvements in sales proficiency may fail to take root as well, because systemic reinforcement is largely absent in other areas of the company.
Winning Versus Losing and the Transition to Solution-Centric
So how can companies make a more "balanced" transition to being real providers of solutions, and in turn better address the major factors in winning versus losing? The key lies in the aligning of "above the funnel" functions closely with "in the funnel" sales execution. That means company strategy and marketing have a material role to play in making a "sales" transformation. Before delving into specifics, it's important to consider what the term "solution" means in a business context.
That means the real test for a "solution" is whether there is clear, direct linkage with a specific problem (or problems). In addition, the solution must address the actual causes of the problem and have a traceable impact on causal outcomes. Simply calling your products "solutions" or bundling products with services does not necessarily meet the criteria of a real solution - nor does it help sales people articulate defensible value at the point of sale.
Sustainable change and results require a systemic approach - adoption at the business model level. In essence, becoming a solution-centric organization involves four key dimensions of transformation. The illustration below contrasts characteristics of product-centric DNA versus solution-centric DNA in each key area of transformation.
This re-alignment gets the very core of why you company exists as a business. Essentially, it aligns how you will be perceived as company, how well your "products" will address real customer problems, and how well your company communicates that value to customers. But even when companies acknowledge that their DNA is primarily product-centric, and they need to make a holistic change, the question remains - how? How do we systemically change how we think, communicate, engage, and reinforce? The illustration below outlines a framework for understanding and making this transformation. The framework provides both an assessment template and implementation guidelines to understand where key gaps exist in successfully marketing and selling solutions. While this article cannot explore the details of the overall framework, the illustration below provides a high level view of the approach.
Taking Meaningful Action
Making a successful transformation to a solution-centric organization can have profound and lasting impact on the "revenue engine" of your organization. It addresses the systemic aspects of "connecting" your organization with real problems and needs of customers. It can have a material impact on winning versus losing by addressing key aspects of company perception, the value of your solutions, and the ability to have "consultative" sales conversations with customers.
Before launching that next "sales improvement" project, it's important to realize that the selling landscape has shirted in the past 4-5 years, and today's selling barriers are systemic and potentially upstream of the sales force. How you are perceived as a company, and well you actually solve customer problems are as relevant to winning versus losing as selling proficiency. To take meaningful action that will have sustainable impact, take the following considerations into account:
Robert Kear is Chief Marketing Officer and Director for Sales Performance International ( www.spisales.com or www.solutionselling.com ), a sales and marketing transformation company. He has over 20 years of extensive, hands-on experience in all facets of technology industry management, including marketing, sales methodology, software engineering, professional services delivery, and P&L accountability
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