Is it simple?
The world of sales has, historically, broken down into two broad areas. There’s ‘traditional’ simple sales (think sales representative with a product portfolio) and complex sales (where a sale involves multiple components that make up the solution and/or numerous stakeholders).
However, in the increasingly competitive world of business-to-business, it’s becoming harder to find examples of sales that fall entirely into the first category. With greater transparency due to the wider availability of digital information, companies are having to compete on the totality of their offering – it’s not just the product, but the service, expertise and support that surrounds it, for example.
Our expectations of a salesperson’s role have to change – and we’re going to need to provide them with an evolving skill-set if they’re going to compete.
Why so complex?
Let’s take a look at this move towards complex sales and the implications of that complexity. Complex sales normally incorporate a number of factors: They often involve multiple stakeholders or decision makers, all of whom might need to give buy-in to any purchasing decision. This in turn leads to longer sales cycles and greater risk – for all parties involved.
What do we mean by ‘risk’? Well, think of it as a matter of multiplication. From the perspective of the buyer, each factor in the sales cycle has a cost – the amount of people in the process, staff hours involved, the price of each element in the desired solution, and so on. When we multiply these together, we can end up with an extremely large number. This puts a quantifiable figure on the ‘risk’ of the purchase – a buyer is committing a serious amount of resources towards a solution, which, if not fit for purpose, could turn out to be an extremely expensive mistake.
This is where the transition from sales representative to a more ‘account manager’ style role becomes relevant. To be able to reduce the customer’s concern over risk, the salesperson needs to be able to reassure them that the proffered solution is exactly fit for purpose and will offer an optimal return on investment. The salesperson needs to pivot from a product-centric position (while still having a good understanding of the portfolio) to a customer-centric one, identifying the specific problem that a customer faces and crafting a solution that exactly fits.
“Increasingly, solutions involve not just products, not just services, not just expertise, not just resources but, increasingly, digital solutions – and digital solutions that connect to the cloud. From the account manager or the salesperson’s perspective, they need more expertise around them to be able to explain that to the customer, because they’re unlikely to personally have the expertise to explain all the benefits of their solution.”Dave Cusdin, Mercuri International
Furthermore, changes in the way that organizations buy have increased the need to focus on value rather than product features and benefits. Many organizations are trying to reduce the number of providers, increase the professionalism of their buying teams and increase the approval steps in any purchase. They are attempting to look at any purchase as a whole; considering not just how it fits in the section of business that uses the purchase but what impact that purchase has across the whole business. The sales teams that help them to understand and maximize the positive impact of the solution will be the winners of the future.
The solution? Customer value orientation
Customer value orientation, identified as the number one trend in sales in a recent Mercuri Research survey, is at the core of this transition. We need to shift our perspective, with salespeople putting themselves in their customer’s shoes. In itself, this can be problematic in complex sales, since the multiple stakeholders might all have subtly different objectives. A CFO, for example, might be looking specifically at their budget and need to be convinced of the potential ROI. Engineers, on the other hand, will need to be convinced of functionality, or in the case of software might be looking at the bigger picture of technical integrations.
However, regardless of these various – occasionally conflicting – perspectives, it all comes down to one thing – value. Value might well mean different things to different people, but by adopting a ‘Value Based Selling’ approach we can move the conversation away from price alone.
(Non) risky business
One interesting way to think of value is in the context of risk. In many ways, value is directly related to risk – the greater the demonstrable value of a given product or service, the more acceptable risk becomes. Or rather, we reduce the importance of price in any conversation – if we can show that a particular solution makes it possible to, say, double productivity, a high buy-in cost becomes almost irrelevant. That ‘risk’ of high capital outlay is countered by the potential benefits to the business.
This is particularly relevant right now. Events of the last few years have exposed, among other things, the fragility of the supply chain and the limitations of the ‘just-in-time’ manufacturing philosophy. The global movement of goods has been shown to be incredibly vulnerable to regional issues; a ‘butterfly effect’ whereby the lack of one component from Taiwan can bring a German assembly line to its knees.
What has this got to do with customer value orientation, Value Based Selling, and risk? Well, for one thing it has changed the conversation about price. Companies are conscious that inflationary pressures (in part related to supply chain issues, although other geopolitical explanations are available…) are driving prices up across the board. So the choice becomes whether to hold prices and look more competitive or pass on these increases to the customer.
In addition, the credibility of the total sales offering – the reliability with which a product or service can be delivered – becomes that much more valuable. It’s no good getting a great deal on a component if it’s not available for delivery.
While undercutting the competition might make for short term increases in turnover, it’s not a sustainable model in terms of profitability or long term growth. Instead, the current situation provides an opportunity to move the conversation away from price, talking instead about ‘value’.
Risk is an ever present factor of doing business. It’s part of a constant balancing act – assessing risk versus reward. For sales, it should be regarded as an opportunity – by adopting a customer-centric approach and implementing Value Based Selling techniques, we can reassure customers that their risk in making a purchase is – if not completely eliminated – at least lowered as much as possible. Risk in business is inevitable – it is the job of a good salesperson to present it as acceptable.