Services-led Selling: Lessons From the Field
Imagine you are the VP of Sales for a business that has utilized the essentially same go-to-market model and value propositions to transact with similar customers for over a century. Your strategy of selling highly technical, stand-alone building infrastructure products has successfully launched and sustained countless careers and delivered enormous shareholder value in the bargain. The most sophisticated buyers you’ve traditionally dealt with are building engineers or technical architects.
Now fast-forward to the age of network integration. Suddenly, your stand-alone products are now part of a much larger, integrated solution. The building engineers and technical architects that were once your buyers are now merely influencers of a COO or a CFO. Your value propositions about technical efficacy are increasingly irrelevant to these new buyers who want to know how well your portfolio of products and services work together to deliver value to their businesses. Your field sales reps, the lifeblood of your commercial engine, are increasingly unable to compete against more sophisticated market players. You’re losing business, personnel and morale, and your CEO is knocking on your door wanting to know why. What do you do?
The situation above depicts an increasingly prevalent reality for many companies in the age of services-led selling. The proliferation of technology and the ability to place stand-alone, analog devices and systems onto digital networks has transformed relatively simple sales cycles into long, complex pursuits. Customers increasingly view technology as a commodity; the value they perceive is in the ability of a vendor to bundle technology and services together to deliver tangible business value and mitigate customer risk, deliver cost savings, and/or contribute meaningfully to customer revenue generation.
Consider the following example. A recent client sells safety products: fire alarms, sprinklers, halon-based suppression systems, security/access control, people-monitoring devices, building infrastructure monitoring devices and many others. Traditionally, they covered the market in product silos by dedicating sales personnel to each major product family. This was adequate in the era of stand-alone, analog technology, but woefully inadequate to address the demands of customers seeking integrated services.
For example, hospitals increasingly don’t want to buy their fire alarms, sprinklers, nurse call, patient monitoring, security, and other infrastructure piecemeal; they want integrated Life Services. The value proposition to a hospital CFO is not merely the technical performance of the point products; it is the ability of those point products to work together to safeguard the lives of patients and staff in the hospital with the objective of lowering hospital liability (risk).
So how should this client adapt to meet the needs of more demanding customers like the hospital CFO described above? The tactical solutions differ for each individual client, but the common element among all is the need for fundamental sales transformation; the client in the example had to existentially change their sales model in order to survive the changes in the market place. From this example and others on which the Alexander Group has worked, we can derive several key principles that are relatively universal:
- Senior management must believe sales transformation is necessary and not optional. As a VP of Sales for one of our clients put it: “Guys, either we do this or our replacements will.” Those resistant to change will view lack of executive unanimity as a signal that transformation, if ignored long enough, might go away.
- Don’t transform instantaneously; deploy pilots on a regional or even a district basis. It is much easier to course-correct a transformation for a population of 30 than one of 3,000. You will make mistakes and encounter unforeseen perils throughout this process no matter how well you plan and execute.
- Focus on essential elements to facilitate change. You can’t do everything at once, so don’t try. For our example client, we focused on changing the sales coverage model, the sales compensation plans of the affected roles, and on delivering new, automated sales playbooks embedded in the CRM system in an effort to drive behavioral change in the transformation pilot group as quickly as possible. Elements such as training, sales process redesign, new market segmentation, rep and manager competencies, new metrics and reporting, and many others will be funded and enabled as the pilot progresses.
- Product silos do not work in a services-led environment: eliminate them. Account managers must be able to sell across the portfolio in a manner that delivers value to the customer. Such selling cannot happen if the AM has a parochial bias toward a particular product at the expense of others. Sales organizations can utilize sales roles such as Product Specialists, Service/Solution Architects, Pre-Sales Technical support and other sales roles with a technical valence to fill in the gaps where technical expertise is needed and warranted.
- Be patient and courageous. Based on experience gleaned from Alexander Group project work, it takes 9-18 months for a new sales model to become firmly entrenched in all but the smallest B2B sales organizations. During this period revenue disruption is unavoidable; successful transformation requires patience and courage from the management team.
Sales transformation is a difficult, perilous process that should not be attempted lightly. It is always difficult to transform a historically successful sales organization into something else. Turnover and revenue disruption will occur, as will customer attrition, testing the fortitude of even the most resolute executive. For those with the patience and courage to endure, the ability to deliver value to customers via services-led selling promises larger, more stable recurring revenue streams, increased market share, and most importantly, continued viability. As Charles Darwin once observed, “It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change.” For sales executives in a services-led sales environment, truer words were never spoken.
Contact an Alexander Group practice leader.