False Choices: Transactional Versus Solution Selling Approaches

Often, I get into conversations about the sales approach a company deploys. There are questions of, “should we be transactional, product, solutions, consultative focused?”

Often, particularly with XaaS companies, the executives leap to the conclusion, “We have to be transactional, “SaaS” focused. We want to drive predictable revenue through a high volume/velocity transactional approach.” That’s often because, “that’s what every other SaaS company does.”

Others have a biased view based on what they perceive as the complexity and impact of their offerings, “We want to be a high value add partner and want a solutions based approach to selling.”

Sadly, most focus on pitching their products, trying to find receptive customers, because that’s they way they’ve always done it.

Or there are those that change their approaches, chasing the latest shiny new methodology. For example, “we’ve got to do Challenger/Insight based selling…” As much a fan I am of this approach for very complex buying environments, it’s often the wrong choice for many buying environments.

In developing these models, we are creating an “inside-out” view, focusing on what is most efficient and cost effective for us, but perhaps not effective for how the customer buys.

The reality, is these are false choices. We can’t choose to be transactional, product, solutions, or consultative focused—at least if we want to be successful in successfully engaging our customers.

It’s our customers and their approaches to opportunity/porlbme solving and the associated buying processes that determine our most impactful sales engagement model. We don’t choose how we sell, rather we must choose how we effectively and efficiently respond to the way our customers buy.

For example, transactional selling approaches are very efficient, very predictable, and easily scalable. But if our customers purchase of our solutions involve a complex buying process, our engagement model will be completely disconnected with how the customers buy. They will perceive our approach to be shallow, unresponsive to the multiple buyers, unresponsive to the dynamic shifting process, unresponsive to the risks, and so forth.

Likewise, if we adopt a solution/consultative selling approach to customers that have a simple, transactional buying process, (for example they are experience knowledgeable buyers, few people are involved, the risks are known and easily managed), we would frustrate them by over complicating the process.

In each situation, choosing a sales engagement approach that is disconnected with how the customer solves problems (of the type we solve), and how they buy will not achieve the results we and our customers want.

Customer buying processes might be characterized as simple/transactional, complicated, or complex. To effectively engage customers we have to align our sales process to how they buy and engage them in ways that create value to that process.

This is the outward-in process.

And this is the mistake too many organizations make in designing their sales engagement models. They believe they are in control of their sales engagement model, where the reality is the customer buying process enables us to define the most effective customer engagement model.

What we do control is the definition of our target markets and our ideal customer profiles. We establish this by understanding what problems we are the best in the world at solving, then identifying the characteristics of those customers who have those problems. This becomes our ICP. Once we have defined our ICP, we understand how they solve these types of problems or address the opportunities. We look at their problem solving and buying approach understanding and characterizing that for the ICP.

We can then design the sales engagement process that complements the buying processes of customers who make up the ICP, And we can design the engagement model that is most effective and efficient in responding to that particular type of buying process.

What we learn in the outside-in approach are a number of things:

1. The most effective sales engagement model to support the customer’s buying process.
2. We may have multiple ICPs, with different buying processes, we have to optimized the engagement model for each buying process. As a result, we can simultaneously approach certain categories of customers with a complex/consultative model, and other categories of customer with a transactional model (The sales evolution of SFDC is a fantastic case study of this).
3. How customers buy changes over time. What may have been a very complex buying process, may over time become very simple. For example, in the early 90’s, I was EVP of sales for a company. We decided to equip our sales people with laptops (well at the time, they were more luggables). At the time, it was a very complex buying process, with people from my team, IT, finance, operations, and support involved in the selection process. All the vendors used solutions based approaches in working with us. Over time, as all of us have become more knowledgeable about buying these tools the buying process has become much more simplified and the right sales engagement model is either highly transactional, or even self-serve.

We really don’t choose our “optimized sales approach.” Rather it is driven by our target markets/customers and optimized around how they buy.

Anything else misses the target and will not produce the results you want or need.

Afterword: For more detail on aligning your selling approach with the customer’s buying process, look at my posts on sensemaking and Cynefin.