It’s critical that we differentiate our offerings and solutions from the alternatives the customer is considering. Marketing, product management, and sales all spend endless hours trying to figure out that differentiation, to create that edge. But too often we get it wrong.
We focus on unique features and functions of our products, how our approach is different and better. About a year ago, someone shared a differentiation document their product management team had put together. It was 200 pages. It went through each screen and each field of their software product. It had very valuable tips like, “The way the customer enters the date field is very different than the way it’s done by our competition.” or “The drop down box in this field provides the customer easy and consistent choices……, versus our competition which has a text entry box only….”
You can imagine a 200 page document filled with these “critical differentiators.” Surely, all we have to do is drop a copy of this on the customer’s desk, and they will be driven to issue a PO.
Or we seek to be unique, “We’re the only company in the world that allows you to enter all your data in Hex!” But who cares!
For differentiation or uniqueness to be valuable (remember, we are all about creating value for our customers), it has to be relevant! If the customer doesn’t care about it, or it’s unimportant to what they are trying to achieve, our attempts at differentiation only waste their time and aggravate them.
Until we understand what the customer values, until we understand what they are trying to achieve we can’t begin to determine our differentiation or uniqueness. Because, what each customer values is different! Once we understand this, we can determine the differentiators or areas of uniqueness that are relevant and create greater value to the customer.
So stop wasting your time creating endless lists of how you are different. It’s meaningless. Tell your marketing and product management people they can be spending their time more productively than putting together tomes on the finest points of differentiation.
Invest your time in understanding what your customer values. Then look at the areas of differentiation that are most relevant and add value.
Above all, never forget, the most sustainable area of differentiation is created by sales. It’s the value we create in engaging the customer and guiding them through their buying process!
Why Do You Sell?
The other day I was having a conversation with someone. He asked a very intriguing question, “Why do you do what you do?” He was referring to my businesses and how I work.
It got me to thinking, we each need to reflect periodically about the choices we make in our lives and careers. It’s easy to get distracted by all the activities and the sheer momentum of work, but if we don’t reflect periodically, we lose our ways. As a result, our effectiveness plummets. We start putting in the hours, but they have no meaning and it becomes work–drudgery.
Why do you sell?
The easy answer is, “to make money,” but that doesn’t really answer the question. There are plenty of other thing we can do to make money. Honestly, there are plenty of other choices to make lots of money.
Selling is tough, when you think about it, the money, however good it might be, is not enough to cause us to sell year after year after year.
So there has to be more to why we sell than just the money.
Here are some thoughts:
The sheer diversity of what we do and who we work with. Each customer and situation is different. We meet dozens to hundreds to thousands of new people every year, each facing different challenges. Every day is different, every customer is different. No chance of ever getting bored.
It’s very entrepreneurial. Our companies give us accounts and territories, saying, “Maximize our share in the territory.” It’s up to us to figure it out. We leverage resources to help us do it, but in a sense, it’s our own little business to build.
The accountability! It’s been said many time, “Nothing happens until someone sells something.” Our companies are dependent on our ability to sell. Likewise, we have an accountability to our customers, they are putting their futures in our hands.
It’s like figuring out a puzzle. Trying to figure out what is happening with the customer, trying to figure out what it takes to win.
It’s creative. Figuring things out, developing a strategy, executing it, creating a solution, no situation is the same.
The competition is exhilarating. Getting the customer to choose you above all other alternatives. Winning is great, but the competition is exhilarating. If we lose, it forces us to come back stronger the next time.
What else can you do that enables you to build so many deep, interesting relationships?
Having people bet on you and trust you! When you win, people put their destinies and that of their companies in your hands. If you recommended the wrong thing, they won’t achieve their goals. In some cases, they may lose their jobs, the companies may falter.
For me, the biggest reward is the ability to contribute–to Make A Difference–or to have an impact. To see people and organizations change, achieve their goals, their dreams, to produce results they couldn’t have with any other solution.
Money is nice, it’s one measure of success, but there’s so much more.
Why do you sell?
Losing The Negotiation Before It Starts!
Sales people seem to be obsessed with negotiation. They read books, they take all sorts of classes, they strategize “negotiation” sessions. Oddly, when I push on the negotiation issue, most negotiations that sales people focus on is about price.
Don’t get me wrong, I’ve been involved in a lot of very complex negotiations for very complex deals and projects. Price is always an element, but there are a whole number of other elements–actually usually focused on ensuring each party has thought through things and is committed to shared success. There are lots of scenarios that require very complex negotiations, but for most of us, our “negotiations” don’t fall into this category. But sales people obsess over the negotiation–and it’s really an obsession about price. I’ve never quite gotten it.
I think one of the reasons we obsess over negotiation, is that we have set ourselves up for tough negotiations long before anybody steps up to the table. We leave the customer and ourselves with nothing to talk about but price. We leave our customer in the position that the only differentiation between alternatives is price. Our customer is indifferent to the solution.
And it’s our failure that puts both the customer and us in that position.
We do this by not creating and quantifying a high value to the outcomes the customer is trying to achieve. In the selling process we’ve focused on convincing the customer about our product/solution, not the business results they achieve of the business results they would forego by not making a change.
We’ve failed to differentiate our offerings from the competition. Sure our product has a few more features and functions and we’ve made sure to remind the customer constantly about those. But we’ve failed to demonstrate how our solution can help the customer achieve things they could not achieve with any other solution. We haven’t even gotten to the discussion that the competition “claims” to produce the same outcomes, because we continue to focus on differentiating the product. We haven’t differentiated the outcomes or the customer’s ability to achieve those outcomes with anyone but us.
We’ve failed to provide leadership through the customer’s buying process. Challenging them, getting them to think differently, helping them understand issues they may not of have considered, ask questions they may not have been aware of, helping them understand what they don’t know, helping them identify potential problems and avoid them. We haven’t made ourselves indispensable in their buying process, instead becoming easily substituted in the implementation.
By failing to do the right things and get the customer to focus on the right things through the buying process, we arrive at the negotiating table with little to talk about–but price. Each alternative is perceived as roughly the same, one vendor blends into the other, rather than standing out. The only way to choose is price.
It’s not the customer’s job to do this stuff. It’s our job! If we don’t, we set ourselves up for potential failure, or at least have an outcome that is less than what we want.
Win-win is critical in negotiation. But we don’t create win-win at the negotiation table, we create it long before. When we sit down at the table, the customer knows they can’t achieve their desired outcomes without us–no alternative comes close. They customer knows the business results they will receive–quantitatively and qualitatively. The customer know that every hour or day spent in “negotiation” (by this I mean quibbling over price), the defer their ability to achieve those results—or worst, put it at risk. What else is there to do but sign the agreement and move forward to produce the results?
Now, I can hear the shouts, “But Dave, you are being naïve and unrealistic, we have to negotiate, we have to arrive at agreement.”
Absolutely! But hopefully, we’ve been building that agreement through the whole buying process. Hopefully we have shared agreement on the desired outcomes. Hopefully, we’ve identified the risks and challenges together, developing an implementation plan that addresses those. Hopefully, we’ve identified and addressed all the issues that impact our ability to achieve shared success. These are all critical, but they really need to be solved before we get to the negotiation table.
But you’re still saying, “Dave, you are being naïve about price!”
Well if we’ve done our job, we can look the customer in the eye and state, “Do you mean that you want to defer your ability to produce the results you expect, to put your ability to achieve them at risk, in order to save a few dollars?” Last week, I coached a sales person in a small negotiation, but nonetheless important. She had done a great job in understanding and articulating the business value. Likewise, she created compelling differentiation–the customer really wanted her solution. The negotiation was very simple, she made the statement, “Do you want to defer your ability to save $14,400 a year for the next several years, as well as meet your project deadlines to save $186 for my product?” You know the outcome.
Negotiations can be very difficult. Price is an element of every negotiation. But don’t make it more difficult than it need be. Make sure you are doing the right things with your customer far in advance of sitting down at the table.
This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.
Not long ago, I was meeting with the top management team of large organization. They had traditionally, had a large field sales organization. The performance of the organization was OK, they were making the numbers, but increasingly challenged. Sales people were just overworked, stretched very thin. Volumes and expectations were increasing. The needs for recruiting and bringing more sales people on board were skyrocketing.
And the costs of selling were starting to spiral out of control.
The top management team was asking me what to do. I know they were thinking, how can we make our field sales people sell much more so costs of selling could be better managed. Instead, I suggested some completely different models–perhaps leveraging channel partners, or moving much more of the sales function inside.
The CEO was dismayed (and I think a little disappointed in what I had said). He said, “Dave, I understand inside sales very well–but they are much more suited for transactional business, standardized, commoditized products. Our services and solutions are very complex and require high face to face engagement. Inside sales would never work for us.”
I find too many people have a real misunderstanding of inside selling.
It’s true, much of inside selling has been focused on transactional, commoditized products/services/and solutions. Inside selling can be very effective and efficient for those. But technology is even enabling much of that old role to be shifted into even more effective and efficient electronic channels. Much of that transactional/commoditized selling will be shifted out of the inside channel into newer self serve channels.
But inside selling has been and can be very effective for highly complex and difficult products/solutions/services. In the mid 90′s, I had the privilege of doing some work with the Digital Equipment Corporation/Compaq inside sales teams. They were selling many of the same and very sophisticated solutions their field sales organization was selling. They were managing very complex deals, closing multi million dollar solutions. Admittedly, at the time, they were a bit of an exception, but they challenged the notion that complex high value sales can only be accomplished face to face.
Fast forward to today, technology, changing buyer requirements, better understanding of inside sales has created hundreds, if not thousands of highly capable sales organizations, selling very complex, high value solutions. Inside sales teams are going toe to toe with many field based sales organizations. The skills, capabilities, sophistication of these teams is every bit as strong as the best of direct field sales teams. They can handle virtually every kind of solution a field sales team can sell–they just don’t travel to the customer.
Changing customer buying preferences, greater comfort with technology, lower costs technologies have facilitated much of this. The so called “personal touch” of field sales can be achieve through conferencing tools and other things (Cisco is creating a $Billion plus business out of telepresence.)
Changing work habits add to this. The other day, I was at a client location. Everyone was literally within a couple hundred feet of each other. There were conference rooms available, but we needed to hold a quick meeting with half a dozen people. We could have done it face to face, instead, we had a video conference between the group of us–two of the people participating had adjoining workspaces.
We, also, have to look at how highly effective field sales professionals spend their time, as well. Much more is spent on the phone or conferencing–not traveling out to visit the customer. In fact, they are shifting much of their time from the outside to the inside.
I look at the experience within our own company. Selling general management consulting services is very complex. Each project or deal is very different. Customers are different. The deal values are typically hundreds of thousands, and every once in a while, millions. 15 years ago, 85% of our selling was face to face. We would typically have to jump on an airplane, visit a prospect, spending time bonding, looking at the organization, and framing an engagement. We sought to minimize the number of trips–it could be quite expensive and time consuming to fly to Shanghai, Mumbai, Stockholm, Melbourne, Paris, J’burg, New York, Atlanta a few times.
Today, it’s completely different. 90% of the time, the very first time we may see a client face to face is on the first day of the project. There are even some, we have never met face to face. The entire project is completed virtually (though in truth, this is currently rare).
Work methods have changed tremendously. Both how organizations work internally and how they work with potential suppliers and partners. Field sales is a very important channel and approach for some types of buying processes. But to think that field sales is mandatory for complex high value solutions and that inside sales is only valuable for high volume commoditized transactional solutions is a mistake (not to mention demeaning the talents and capabilities of tens of thousands of highly talented inside sales professionals).
As sales leaders, we have to constantly reassess our deployment models. We have to engage our customers in the most effective and efficient manner possible. But the old rules have changed. If you’ve always deployed a field sales organization, just because that’s the way it’s done, you may have the wrong engagement model. Inside sales is a powerful means of selling very complex and high value solutions. Likewise, sales that used to be handled by inside sales can probably be moved to even more cost effective channels.
There’s a lot of discussion about the growth of inside sales. This should not be surprising, in fact what is surprising is that it hasn’t happened much faster! The things that really should drive your deployment models are understanding customer buying preferences, then implementing the most effective–but affordable deployment model possible.
What are you doing to reassess your deployment model? Are you stuck with the same old same old, or are you looking at the most effective way of engaging your customers at the lowest possible cost of selling?
