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:
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.
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