The Inflexion-Point Blog: VALUE SELLING STRATEGIES

It’s a fundamental principle of value-based selling that whenever a prospective customer is unable to establish any meaningful difference between the options open to them, they are likely to choose what they perceive to be the cheapest or safest option.

If we are neither of these, our chances of winning their business are dramatically reduced, and so if we are determined to compete on value rather than price, we need to differentiate our offering in a way that is perceived to be significant by our potential customer.

Unfortunately, many technology-based businesses fall into the trap of believing that they need to take a “value-added” approach when positioning their products or services - but then do so in a way that is often irrelevant or unattractive to their prospects...

Why do apparently promising sales opportunities go wrong so often? Why do close dates speed past, get reset and then repeat the cycle? Why do so many sales forecasts bear so little relationship to reality?

Rick Page, founder of The Complex Sale offered sound advice in the title of his deservedly best-selling book: “hope is not a strategy”.

To which I’m inclined to add “and ignorance is no excuse”.

Page was right. Hope is not, and can never be, an effective strategy. The word should have no place in our sales vocabulary. But I’ll wager that the H-word is still being used every day in countless conversations between sales people and their managers.

Accurate opportunity qualification is perhaps the single most important foundation for success in complex B2B sales environments. In the absence of an up-to-date and accurate assessment of the specific circumstances of each of their active sales opportunities, sales people are doomed to waste significant amounts of time and energy pursuing deals that they are never likely to win, or are never likely to do anything, or would not be worth winning.

As a consequence, many sales organisations have attempted to implement a standardised approach to qualification. But creating qualification guidelines by itself isn’t enough. The criteria must be consistently, thoughtfully and honestly applied, and not regarded as a “box-ticking” exercise.

An inadvertent typo (“qualifiction”) in a recent client opportunity review session served to remind me that qualification must always be based on fact and not on fiction or - as seemed to be the case on that occasion - on comfortable but unjustified assumptions.

Sales consultants often make the distinction between transactional and complex sales. Transactional sales - whatever their value - tend to have a relatively simple buying journey, are associated with lower decision risk, and involve fewer stakeholders. The decision is often regarded as tactical rather than strategic, the information required to support their decision is often straightforward and based on specification, price and delivery and the decision-making process itself is typically linear.

Complex sales, on the other hand, tend to be subject to a complicated and often non-linear buying journey, tend to have a higher decision risk, and involve a larger decision team. The decision is often regarded as strategic, the information on which decisions are based is usually complicated and sometimes contradictory, and there is a very real possibility that the potential customer may - after devoting significant effort to the exercise - simply decide to stick with the status quo.

But after observing a large number of complex sales environments, I’ve come to the conclusion that there is another significant factor at play - and that is whether the customer is involved in a familiar or unfamiliar purchase...

It’s falsely comforting to think of selling as a process in which one step follows logically after another. But although rigidly defined processes might be the best way of running a manufacturing production line, they completely fail to reflect the reality of any moderately complicated sales environment.

It would be convenient if things were simpler. But the truth of the matter is that in complex B2B sales your customer’s buying processes are rarely linear, compounded by the fact that they are sometimes poorly defined or even if they are well defined are often not well understood by many of your customer's decision team.

As Gartner have identified, rather following a perfectly straight path, complex customer decision journeys typically zig and zag, go backwards as well as forwards, find themselves way off-piste, struggle to achieve consensus, can be redirected on the whim of a single powerful individual or can be abandoned at any stage along the way.

Like a growing number of other commentators, I have come to believe that the traditional BANT (Budget, Authority, Need and Timeframe) approach to sales opportunity qualification is fundamentally flawed and not fit for purpose when it comes to complex B2B sales.

The fact that over 40% of purchasing projects are ad-hoc rather than formally budgeted is, as I argued in a recent blog, yet another nail in the coffin of this outmoded and discredited methodology. But if not BANT, what can you use instead?

Any alternative approach has to take into account the fundamentally non-linear nature of B2B buying decisions, particularly when they relate to solving a new and unfamiliar problem (as opposed to repeat purchases of well-known commodities).

It surprises and shocks me how many sales organisations still regard BANT as a practical way of qualifying sales opportunities. For those who are unfamiliar with the term, it dates back to the steam-driven days prior to the emergence of the Internet, SaaS and modern buying behaviours and stands for Budget, Authority, Need and Timeframe.

Now, at some point, any significant purchase decision probably requires all four elements, but using BANT as an early stage qualifier is madness - something that is reinforced by recent research by Gartner that revealed that over 40% of software buying efforts were ad-hoc rather than formally budgeted in advance.

That means any sales person insisting that leads are “BANT” qualified before they are prepared to engage with them is missing out on nearly half of their potential opportunities - and by the time that all four BANT boxes can be ticked, other more astute salespeople are likely to have reached out to the prospect and influenced their thinking...

The idea of a “sales process” has been around since long before I was offered my first sales role. The concept has been heavily promoted by the mainstream sales methodology vendors and adopted with varying degrees of effectiveness by many sales organisations.

But I’m not sure it was ever an appropriate metaphor and with the emergence of an increasingly well-informed customer community the idea that a complex B2B sale can be distilled down to a step-by-step sales process seems increasingly at odds with reality.

This is particularly the case for unfamiliar, strategic purchases where the customer may have no recent past experience of the various considerations involved. As Gartner recently pointed out, the customer decision journey for these sorts of purchases is inherently non-linear and sometimes verging on the chaotic...

If the conversations I’ve been having with sales leaders recently are anything to go by, our sales pipelines are full of opportunities that start off looking like they are going to end up in a quick sale, but then get stuck somewhere in the middle (or towards the end) of the process.

And if my observations accurately reflect the underlying reason, then it’s worth us reining in our sales people’s natural enthusiasm and helping them to recognise that they will be more effective in shortening their sales cycle by slowing down their initial interaction with the customer.

It’s a subject I’ve referred to before, but it’s worth returning to again. If our customer acknowledges a need that we know we can address, it’s a natural (but wrong) reaction for a sales person to want to explain how they have a “solution” for their customer’s problem.

This tendency to premature elaboration (and the associated temptation to demonstrate and propose our solution as soon as we can) may initially give the impression that the sales cycle is moving forwards, but it all-too-often simply stores up avoidable future delays...

I’ve just spent a few minutes completing the annual survey from one of the world’s most widely respected sales training organisations. Of course, I haven’t yet seen the results, but I was intrigued by the implications behind a number of the questions.

There appeared to be a strong implied endorsement of the value of adopting a structured sales process – a theme that is promoted by many of the established sales methodologies. But I’ve come to believe that this is now an outdated approach, particularly if taken to extremes.

In fact, the very word process is unhelpful. It implies linearity and a “production-line” approach to selling - which as any observer of complex buying decisions will know is completely at odds with how typical buying decisions are actually made...