s
ales
f
orces will need to
c
reate
v
alue, not just communicate it
John DeVincentis and Neil Rackman
Rethinking the SalesForce
but even in the same industry, different customers see value very
differently
Value is in the Eye of the Beholder
Value = Benefits - Costs
So two ways to create value:
1. Generate additional benefits
•
Increase the ability of the SalesForce to deliver benefits
by improving problem-solving capabilities, or spending more time
2. Reduce costs of the benefits they already provided
•
Use cheaper ways to sell
The better approach depends entirely on the customer
The customer decides whether any benefit is real
Segmenting by Seize isn’t sufficient
Since the 60s most sales organizations
have segmented their customers by seize
a practice that has served well for many years
Consider the accounts of roughly the same seize,
approached all three in much the same way,
using similar amounts of resources
Yet despite their superficial similarities,
Segmenting by Seize isn’t sufficient
Customer A
“Don’t send me your sales people, just send me your quotes. And those quotes had better be fast and cheap,
because you have a dozen competitors who will get your business if they beat you on speed and price”.
Customer B
“We need a lot of help. Every one of our office does things its own way.
We don’t have a common set of procedures or a common information system. We’ll write a lot of business with you if your people are prepared to work with Each office individually and helps it get its act together”.
Customer C
“What we want is a strategic partner that will put its underwriters into our offices, develop cutting-edge information systems with us to turn quotes around more quickly than anyone had thought possible, and work with us to develop new and innovative risk management systems.
We’d like to leverage some of your back-office know-how, and we’d be interested in having your marketing people contribute to our internal planning process”.
Matching Sales Strategy to Customers
•
It is not only in resource allocation that SalesForces typically go awry
•
They also fail to recognize that different approaches to selling may
needed for different customers
•
Learn that customers should be segmented according to the way they
perceive value
– Transactional sales
– Consultative sales
– Enterprise sales
Transactional
sales
Transactional
sales
Consultative
sales
Consultative
sales
Enterprise
sales
Enterprise
sales
strip costs create new valuecreate extraordinary value
Investment by customer
Investment by
supplier
Waste, over-resourcing
Risk, competitive vulnerability
Investing to meet Customer’s Expectations
Transactional Sales
Customer A and its peers
•
Value is in the product alone
•
SalesForce adds little or nothing for them
•
They already understand what they’re buying and know how to use it
•
It is a commodity
•
They simply want a favorable cost
•
Reckoned either by price or by ease of acquisition
•
They resent time they have to spend with salespeople
Consultative Sales
Customer B
•
Value is not inherent in the product
•
It lies chiefly in how the product is used
•
SalesForce can create a great deal of new value, putting a premium
on advice and help
•
These customers expect it to enlarge their understanding of their
needs and options
•
SalesForce gets close to the customer and has an intimate grasp of
their business needs
Î Ability to listen and build up an understanding of the customer’s business is a more important skill than persuasion
Enterprise Sales
Customer C
•
They do not simply want the products or advice of the supplier
•
They also want to make full use of its core competencies
•
They will transform their own organization and strategies to make
most of their strategic value relationship
Î This is an alliance between business equals working together to capture an extraordinary level of new value that neither could have created alone
Î The redesign and continuous improvement of the boundary between supplier and customer
No amount of selling skills, clever strategy, or well-crafted value proposition can bridge the gap between what a customer wants and what supplier has to offer
A SalesForce cannot transform transactional customers into consultative ones, or vice versa
At best, effective selling can shift the balance slightly, but it is an uphill struggle
The value expectations of big customers, small business customers, and even individual customers are changing dramatically
As a result, SalesForces are in the early stages of a transformation that will affect every aspect of selling
From the simplest transactional sales right through to massive enterprise relationships that are reshaping the entire business strategies of participants,
The three Selling Modes
consultative
enterprise
transactional
no-man’s-landAlmost everywhere, transactional SalesForces have unsustainably high cost structures Consultative SalesForces don’t sell deeply enough to win business
And would-be enterprise players lack the crossfunctional capacity to create enough value to cover the huge costs of its approach
They seem unaware that their mission is not communicating, but creating added value, as their smart competitor is doing
Think in terms of value creation and understand how to structure and manage the transactional, consultative, or enterprise elements of the sales effort
