Posted by Bob Apollo on Wed, May 05, 2010
Many B2B-focused organisations to prefer to talk in terms of delivering “solutions” rather than selling products. CEOs speak about becoming solution-driven rather than product led. But, as I’ve observed in a previous article, that transition is by no means straightforward – or necessarily appropriate.
The s-word is over-used and frequently misapplied – to the extent that British satirical magazine Private Eye used to have a column that regularly poked fun at the worst excesses, including one hapless vendor that described the humble cardboard box as a “flexible storage solution”.
Solving the solutions problem...
Before accepting any more abuses of the English language, it’s probably worth getting back to basics. Dictionary.com defines a solution as “the act of solving a problem”. It’s clear (or it ought to be) that without a problem, you can’t have a solution.
But there’s a world of difference between identifying a potential problem and understanding its implications for your potential prospect. Many sales people suffer from what I’ve described as a premature elaboration problem – they rush to propose a solution at the first sign of an apparent problem.
Diagnose before you prescribe...
This is not only irritating for the prospect, it’s deeply damaging to the sales person’s chances of success. Research by the TAS Group and others has shown that sales people who take the time to diagnose the prospect’s underlying issues and carefully qualify the real opportunity enjoy dramatically better success – in terms of increased win rates, higher deal values and shorter sales cycles – than their over-impatient peers.
You can’t offer a complete solution until you understand the whole problem...
I’m often told by my client’s prospects that “as long as I’m learning something, I’m willing to listen. But as soon as the sales person starts pitching to me, I lose interest”. Your prospect’s first acknowledgement of an apparent problem should always be used as an opportunity to explore, to really get to the heart of the matter, to open doors rather than to slam them shut - and to uncover the whole problem.
Understanding the “whole problem” includes identifying who else is affected, determining the consequences of preserving the status quo, and – perhaps most important of all – understanding what else would need to change before a solution could be agreed and implemented.
Only then are you going to be in a position to propose a solution that addresses all of the implications of your prospect’s current situation and which stands any realistic chance of resolving the real issues.
Solutions are an exercise in change management...
Many sales people under estimate the degree of change required for a proposed solution to be effected. Some deliberately shy away from confronting the complexities in the hope that this will simplify the sale.
But this is a bad tactic on two levels: first, the buyer is going to have to navigate these complexities anyway with or without your help before they decide if and how to solve the problem, and secondly, if you do succeed in winning a sales where your new customer is faced with unanticipated issues, it’s going to do nothing to improve their chances of finding a complete resolution to their problem or of becoming a loyal, dedicated and profitable customer in the longer term.
Improving your problem solving skills...
So how can you systematically improve the problem solving skills of your organisation, and enhance the quality of the solutions you provide to your customers? At the risk of prescribing before I’ve had the chance to diagnose your unique situation, here are a few pointers from other organisations that appear to exemplify best practice in this area:
- Learn from the winning habits of your top sales performers – what questions do they ask, and what techniques do they use to qualify prospects during the all-important need identification stage of the sales process?
- Encourage all your sales people to adopt a questioning framework that really gets to the heart of the problem, rather than accepting the prospect’s first acknowledgement of a solvable problem as their signal to propose a solution
- Ensure that your sales people explore the consequences of the prospect simply continuing to live with the status quo – and identify who else would be affected
- Never underestimate the degree or scope of change within your prospect’s organisation that may be necessary before a complete solution can be achieved. Expose and confront the issues rather than sweeping them under the carpet
Please share your comments and experiences. And if you’d like to hear more about what I’ve learned from observing best solution selling practice across some of the top-performing B2B sales and marketing organisations, please drop me a line at bob.apollo@inflexion-point.com or give me a call on +44 7802 313300. I look forward to hearing from you.
Posted by Bob Apollo on Tue, Nov 24, 2009
Recent research from the Stanford University Graduate School of Business suggests that companies that eliminate bonuses for achieving sales quotas generate more revenues. According to Professors Nair and Misra, the benefits can be significant – in one case stimulating a 9% uplift in revenues.
As 2010 approaches, that sort of sales uplift could make the difference between achieving your revenue goals for the year - or falling short. It’s a powerful argument for reviewing your sales compensation plans now, so that you’re ready for the new business year with a set of principles that can optimise your sales performance.
If you’ve run a sales force for any length of time, you’ll probably be familiar with the principle that compensation drives behaviour. As Nair and Misra point out, quota bonuses can result in sales people gaming the process. If they have already made their quota for the period they may defer or “sandbag” deals, whilst sales people who see no chance of achieving their quota may instead defer their efforts to the next period.
Removing these quota-related bonuses can help to remove the inefficiencies caused by the sales people’s attempts to game the system. In the example quoted in the research, they worked with an organisation to redefine their compensation plans for FY2009. The results were impressive - the new structure resulted in a 9% improvement in revenues, translating to an additional $1m a month. What’s more, the new plan proved extremely popular with the sales people.
Of course, removing quota-based bonuses may not be the answer in every situation - but the research draws our attention to the need to carefully define the desired sales behaviour, modelling the desired outcomes, and tuning the compensation plan accordingly.
Most organisations want their sales force to be encouraged to maximise profitable revenue, and to do so as early in the business cycle as possible so that end-of-quarter and end-of-year surprises can be eliminated. This can be achieved through careful design of targets and accelerators. Similar principles can apply to incentivising certain elements of the product mix.
As the end of the sales year approaches and you prepare to hit the ground running from the very start of 2010, I suggest you reflect on how well your current sales compensation plans stimulated the desired sales behaviour. Even if you did well, is there room for improvement? And if it looks as if you may end the year short of your original goals, how can you change the situation for next year?
An external perspective may help. We’ve worked with a number of clients to help them structure and tune sales compensation plans that drive the desired outcomes, and eliminate the opportunity for sales people to game the system. Drop me a line at bob.apollo@inflexion-point.com if you would like to learn more.
Getting it right is worth it. On average, organisations spend more than three times as much on sales compensation as they do on advertising. Careful planning can make sure that the money is well spent.
Posted by Bob Apollo on Mon, Oct 19, 2009
Win-loss reports can provide remarkably valuable insights into the mind of your prospects and the ways in which they make their buying decisions.
But you should never, ever, leave sales to conduct the interviews. If you've ever been on the receiving end of the results, you'll know why - but for those of you who haven't...
- When you loose, it was because your price was too high or your product lacked key functionality.
- When you win, it was all down to the strategy and skills of the salesperson.
Either way, you'll never learn what the prospect really thought, because prospects lie to sales people - they can't help it - or they reflect on their post-purchase priorities rather than the things that influenced their decision if, what and how to buy.
It's also likely that the most attention is paid to the closing stages of the sales process - rather than the often more illuminating questions of what triggered the prospect's search for a solution in the first place, what they thought they were looking for, and who they turned to for advice.
It's nigh-on inevitable that nothing new or of any value will be learned from a sales-led win/loss exercise. That's not to say, of course, that the exercise of understanding your prospect's buying process isn't critical - just that there has to be a better way.
First, conduct the win-loss analysis as a structured conversation - not a questionnaire - that encourages the prospect to recall what caused them to start searching for solutions in the first place.
Second, seek to understand how the prospect approached the problem solving process - who was involved, and who did they turn to for advice?
Third, having identified potential solutions, how did they go about getting their organisation to accept the need for change - or if the deal ended in "no decision", what were the barriers to change?
Finally, think seriously about having an external facilitator conduct the conversations. It prevents the prospect's answers being filtered by any preconceptions or vested interests, and almost always results in more truthful - and therefore useful - answers.
Posted by Bob Apollo on Sun, Aug 16, 2009
I was reflecting with a client the other day on the current economic climate, and how hard it was to recruit really good sales people, and how challenging it was to win new customers as a new technology business. It seems that these two challenges are connected.
Crossing the Chasm
Let’s start with something familiar to most of us in high-tech – the technology adoption curve, and the challenges of crossing the chasm that separates the early market from mainstream buyers. When the author Geoffrey Moore introduced the concept – nearly two decades ago – it was reasonable to believe that as much as 20% of many markets behaved like early adopters.
And it was just was well that they did, because these early adopters offered significant sales opportunities to new and relatively unproven technology companies. These early adopters bought new technology because they were interested in finding competitive advantage from new applications for emerging technologies – and were prepared to accept the risks involved.
They assessed vendor offerings in a very different way from their mainstream market colleagues, who insisted on proven solutions to identified business issues.
The Chasm is getting closer
So here’s the first issue – the chasm has moved a great deal closer. Buying behaviour has become more conservative – accelerated by the current economic climate – and most observers would now agree that early adopters now represent a single digit percentage of the buying population. It’s become even more urgent that vendors master the art of crossing the chasm and satisfying conservative mainstream buyers. There simply aren’t enough early adopters to sustain them.
Now let’s turn to the second issue before we see how the two elements are colliding together. It’s the question of the quality of the sales population. Some proportion of the sales population are intuitive sales people, inclined to have conversations and ask intelligent questions. “Solution selling” comes naturally to them, and they are able to qualify early and accurately.
Eagles - and the Flock
Unfortunately, the majority often seem less naturally gifted. Whilst generally competent, they are inclined to give presentations, to make statements and generally depend on good process if these members of the “flock” are to emulate the quota achievements of their “eagle” colleagues. There was a time when these deficiencies might be papered over. But the current tough climate has served to highlight just how few eagles there are in the sales population.
Eagles always represented a minority. I’m not sure that there were ever more than 20% genuine eagles in the sales population. But comparing notes with a number of chief executives, I’m inclined to suspect that true sales eagles may make up an even smaller percentage of the total sales population.
It's inevitably hard (and probably unwise, impossible, or both) to recruit and maintain a sales team consisting exclusively of eagles. So most vendors need to find a way of making competent average sales people more effective.
The 70% Solution
What’s the effect of the interplay between these buyer and seller trends? Here’s the problem: early market buyers have the imagination and inclination to work out for themselves how technology can be used to solve problems. But mainstream buyers need the sales person to convince them that they have a proven solution to their business issue – something that average mainstream sales people are not naturally adept at doing.
So you have a majority of the sales population who don’t naturally sell the way that the majority of the buying population want to buy. No wonder average sales performance – by a number of key metrics – has been declining.
The Answer? Dynamic Scalable Sales Process
The answer lies in crafting a dynamic, scalable sales process that embodies best practice and equips, encourages and enables the average sales person to sell the way their mainstream buyers prefer to buy – and which is reinforced by their CRM system and the sales management regime.
Much of this best practice can be gleaned by observing what the top sales performers are doing to facilitate each significant stage in their prospect’s buying process. Additional valuable insights can be learned from the behaviours and supporting processes of industry-leading sales organisations.
These processes exemplify the way the vendor intends to do business, and provide the framework for aligning sales and marketing around a common purpose, finding, winning and satisfying more of the right sort of prospects.
Using sales play books to share best practice and creating customer anecdotes databases that encourage selling through storytelling have proven to be particularly effective in reinforcing the chosen go-to-market approach.
The benefits can be striking. CSO Insights, in their latest annual survey of over 1,000 B2B sales organisations, concluded that organisations who had implemented a systematic, dynamic company-wide sales process outperformed their peers by over 30%.
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